Paytm hits all-time low; tanks 62% thus far in 2022 on FPI selling

Foreign portfolio investors' (FPIs) holding in Paytm has declined by 4.94 percentage points to 4.42 per cent in March 2022 quarter.

Shares of One97 Communications, the parent of digital payments major Paytm, hit a new low of Rs 517.25, down nearly 3 per cent on the BSE in Thursday’s intra-day trade. The stock was quoting lower for the six trading day, having fallen 14 per cent during this period.

In the past one month, the stock has slipped 26 per cent, as compared to a 9 per cent decline in the S&P BSE Sensex. With the recent correction, the stock has lost 76 per cent from its issue price of Rs 2,150 per share.

It hit a record high of Rs 1,961.05 on its listing day i.e. November 18, 2021 but failed to touch its issue price post listing.

So far in calendar year 2022, the market value of Paytm shares have eroded by 61 per cent on the back of heavy foreign institutional investors selling. In comparison, the S&P BSE Sensex was down 10 per cent during the same period.

Foreign portfolio investors' (FPIs) holding in Paytm has more-than-halved or declined by 4.94 percentage points to 4.42 per cent in March 2022 quarter.

FPIs held 9.36 per cent stake in the company at the end of December 2021 quarter, shareholding pattern data showed. At the time of listing, FPIs had 10.37 per cent holding in Paytm.

However, individual shareholding in the company has increased by 4.23 percentage points to 16.98 per cent in the March quarter from 12.75 per cent in the preceding quarter.

Against the backdrop of volatile market conditions for high growth stocks globally, our shares are down significantly from the IPO price, Vijay Shekhar Sharma, Founder and CEO, Paytm had said on April 6, 2022.

Rest assured, the entire Paytm team is committed to build a large profitable company and to create long-term shareholder value. Aligned with this, my stock grants will be vested to me only when our market cap has crossed the IPO level on a sustained basis, he had said.

Sharma believes Paytm should be operating earnings before interest, taxes, depreciation, and amortization or EBITDA breakeven in next 6 quarters (i.e. EBITDA before ESOP cost, and by the quarter ending September 2023), well ahead of estimates by most analysts.

Dolat Capital expects a 13.1 per cent growth in INR revenue in Q4FY22 for the company driven by traction across verticals (lower QoQ growth as Q3 is seasonally strong, while Q4 is not). It expects EBIT margin to improve by 692 bps QoQ driven by operating leverage.

Update on new use cases to monetize user and merchant base, commentary on scalability of credit to merchant and users, and potential impact of new user ban for Paytm Payments Bank are key moniterables, the brokerage said in its Q4 preview.