Paytm slips 10% after nearly 6% equity changes hands on NSE via block deal

Till 09:22 am, around 38 million shares of Paytm had changed hands on the NSE, the exchange data shows

Shares of One97 Communications, which operates India's largest payments platform Paytm, slipped 10 per cent to Rs 541.40 on the National Stock Exchange (NSE) in Thursday's intra-day trade after nearly 6 per cent equity of the company changed hands on the exchange via block deals.

Till 09:22 am, around 38 million shares, representing 6 per cent equity capital of Paytm, had changed hands on the NSE, the exchange data shows.

While the names of the buyers and sellers could not be ascertained immediately, a Business Standard report said SoftBank planned to offload 29 million shares in One97 Communications.

The global tech investor was expected to offer shares in the range of Rs 555-Rs 601.45 via block deals, to be executed on Thursday. The floor price for the share sale is nearly 8 per cent lower than Paytm's Wednesday's closing price of Rs 601.6. The share sale comes close on the heels of the end of one-year post-IPO lock up period on Paytm shares.

Currently, Paytm shares are 75 per cent below its IPO price of Rs 2,150 per share. Paytm came out with a Rs 18,300 crore IPO in November 2021. The stock had hit a record low of Rs 511 on May 12, 2022.

SoftBank Vision Fund (SVF) held around 113 million, or 17.45 per cent stake, in Paytm. Following the share sale, its stake will decline to around 13.1 per cent. CLICK HERE FOR FULL REPORT

Technical View

Bias: Negative

Target: Rs 530, Rs 505

Resistance: Rs 579; Rs 585

Post its brief recovery to Rs 840-odd level in early August, shares of Paytm once again resumed the downward trend. At current level, the stock is down a whopping 36 per cent in just three months.

Technically, the stock looks fairly weak on the daily charts, with the price-to-moving averages strongly favouring the bears. The short-term (20-Daily Moving Average) stands at Rs 634.20, way below the other key moving averages such as 50-DMA, 100-DMA and 200-DMA at Rs 669, Rs 701 and Rs 691, respectively.

With today's sharp fall, the stock is now seen trading below the lower-end of the Bollinger Bands on the daily chart. Thus indicating that the bias is likely to remain bearish as long as the stock trades below Rs 585. The stock is also quoting below the lower-end of the Bollinger Bands on the weekly chart, indicating resistance at Rs 579-level.

According to the quarterly Fibonacci chart, the stock could seek support around Rs 530-level, below which the stock could test Rs 505.

(With inputs from Rex Cano)