Paytm shares down for eighth straight day; slide 51% against issue price

Shares of One97 Communications, the parent company of digital payments major Paytm, hit a new low of Rs 1,063.75, falling 51 per cent against its issue price of Rs 2,150 on the BSE in Thursday’s intra-day trade.

The stock is quoting lower for the eighth straight trading day, having fallen 21 per cent during this period. It had made its market debut on November 18, 2021.

A sharp fall in the stock price has seen the company lose market capitalisation of Rs 70,418 crore from Rs 1.39 trillion on its issue price. Paytm’s market capitalisation hit a low of Rs 68,960 crore in intra-day trade today. The company stood at 77th position in the overall market cap ranking, the BSE data showed. On the listing day, it was at the 50th position. 

Brokerage firm Macquarie on Monday published yet another report on One97 Communications, retaining its ‘underperform’ rating and cutting the target price of the stock to Rs 900 apiece.

“We cut our earnings (increase our loss projections) by 16-27 per cent for FY22-25E owing to lower revenues and higher employee and software expenses. We cut our TP (target price) sharply by Rs 25 per cent owing to a lower target multiple of 11.5x (Price to Sales ratio) (from 13.5x earlier) and lower sales numbers,” the brokerage said. 

It also flagged attrition in the company’s senior management, its average merchant loan size at sub-Rs 5,000 levels over the past year and regulatory uncertainty in fintech and insurance spaces as concerns. CLICK HERE FOR FULL REPORT

However, Paytm CEO Vijay Shekhar Sharma on Wednesday said that the company's share market performance has been in line with that of global peers in the sector over the past six months due to macroeconomic factors.

“Macro factors like quantitative easing, free money due to US monetary policy and other parameters led to a spook in the market in terms of pricing the IPO. Paytm’s shares have received a similar response to that of global peers in the last six months…But that is not a complete reasoning. What happened to the IPO is still a question,” he said. CLICK HERE FOR FULL REPORT