Paytm Share Price Down 70% From IPO Price: Buy, Sell Or Hold? Here Is What Analysts Say
Paytm share price NSE: Investors wanting to buy Paytm shares can do it with a trading perspective, technical analyst Nilesh Jain said while speaking to Zeebiz.Com. The chart structure is positive, he said, adding that the counter can move upside of 14 per cent from the current market price of Rs 571.
The stock was trading down today by Rs 8 or 1.37 per cent from the Wednesday closing price amid weak sentiments in the domestic equity market ahead of the release of the US inflation data.
Source: NSE
Paytm Share Price Target 2023
Jain, who is Assistant Vice President - Lead Derivative and Technical Research at Centrum Broking, recommended Paytm for targets of Rs 600 and Rs 650 with a stop loss of Rs 540. Investors can look to buy it at current levels or on declines.
The stock has emerged from a consolidation breakout at levels around Rs 540, the Centrum analyst said.
Paytm shares were also recommended earlier by Analyst Simi Bhaumik for targets of Rs 590/600.
Paytm share price has fallen by over 70 per cent from the issue price of Rs 2,150. At current levels, the 1-year returns given by this stock is negative 50 per cent as against (-) 1.3 per cent returned by broader market Nifty50. The underperformance is over 47 per cent during this period.
Technically, the stock is dwelling in an overbought zone with momentum indicator MFI lingering around 86.6 according to data sourced from Trendlyne. Relative Strength Index or RSI, which is another momentum indicator is at 64.5. A number below 20 suggests that the stock is oversold while above 70 is considered overbought.
The volatility in this stock has been low over a 1-year period at 0.91 and below 1.
Read More: Stock Market Today LIVE: Lacklustre opening for Sensex, Nifty50; HCL Tech, Titan shares gain
The fintech company recently informed stock exchanges about its Q3 performance update ahead of the October-December quarter results. Moreover, Surinder Chawla has been appointed as new Managing Director and CEO of Paytm Payments Bank.
The company disbursed 3.7 million loans worth Rs 3,665 crore (USD 443 million, y-o-y growth of 330 per cent) in December 2022, the exchange filing said. The number of loans disbursed during the month was up 117 per cent.
(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)
Paytm Shares Down 9% As Alibaba Sells 3% Stake In Large Block Deal
New Delhi: After China's Alibaba Group sold 3.1% stake in a block deal, shares of new-age fintech , which runs , dropped up to 8.82% to the day's low at Rs 528.35 today.Alibaba, which held a 6.26% stake in Paytm as of end-September, sold 3.1% stake in the company for a total of $125 million through a block deal at a price of Rs 536.95 per share, Reuters reported.
Shares of Paytm, which had last month announced an Rs 850 crore share buyback programme, have so far plunged around 74.5% from its IPO issue price of Rs 2,150.
The stock was among the worst performers in the calendar year 2022. The average target price of 11 analysts, 8 of whom have ‘buy’ ratings, however, signals an upside potential of around 66%, shows Trendlyne data.
In a recent report, brokerage firm Morgan Stanley said the fintech would be a key beneficiary of India’s UPI incentive scheme of Rs 2600 crore for promotion of RuPay Debit Cards and low-value BHIM-UPI transactions (P2M) for FY23.
“Apart from banks, Paytm should be a key beneficiary of the above. As per our estimates, Paytm would have received 5-7% of the FY22 incentive, and assuming a similar share for FY23, this would represent 3-5% of our contribution profit estimate (1% higher than what we previously assumed for FY23),” the brokerage firm said.
In its quarterly update earlier in the month, the fintech firm had reported that the total value of loan disbursements in the December quarter rose 357% YoY to Rs 9,958 crore. "The number of loans grew 117% YoY to 37 lakh for the month of December, and 137% YoY to 1050 lakh cumulative loans for the three months ended December 2022," Paytm had said. The average number of monthly transacting users or MTUs came in at 850 lakh, registering a growth of 32% YoY."Alibaba selling shares in Paytm could be good news for shareholders as it reflects that Chinese shareholding is reducing in the company. This would benefit them in FDI and as the company is already on path to profitability, this will further allay investor concerns," Avinash Gorakshakar, Head Research, Profitmart Securities, said.
"Alibaba seems to be on the exit move from India as it has sold shares in its major investments like BigBasket, Zomato and Paytm. This is a positive for shareholders, as it clears many regulatory paths. In the case of Paytm, the company is on the fastrack to profitability, and has been delivering good business updates," he said.
Paytm said its focus over the past few quarters has been to be on payment volumes that generate profitability for the company, either through net payments margin or from direct upsell potential.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Explained: Why Paytm Shares Tumbled Over 6% Today
New Delhi ,UPDATED: Jan 12, 2023 16:27 IST
Despite recent gains, Paytm continues to trade much lower than its listing price. (Photo: Reuters)
By India Today Web Desk: Shares of One97 Communications Limited (OCL), the parent company of homegrown fintech giant Paytm, fell over six per cent on Thursday. Paytm’s stock price nosedived nearly 9 per cent during intraday trade to Rs 528 per share, but recovered to settle 6.43 per cent lower at Rs 542.25.
Paytm's share price dropped after news agency Reuters reported about a block deal, where China’s Alibaba Group sold a 3.1 per cent stake in Paytm.
The total stake sold as part of the block deal was $125 million, according to a source quoted in the Reuters report. Alibaba, which held a 6.26 per cent stake in Paytm as of September end, sold the stake at Rs 536.95 apiece.
Also Read | Paytm shares rally after company shares strong Q3 business update
It has also come to light that Morgan Stanley advised Alibaba on the deal, but neither of them have given any official comments.
This is the first time that Paytm's shares fell in 10 days. A few days ago, Paytm shares rose after it reported a strong business update for the quarter ended December. However, the company’s shares continue to trade much lower than its original listing price and ended 2022 with a 60% loss, despite the company announcing a share buyback last month.
Paytm’s parent company, OCL, got listed in 2021 in what was India’s biggest IPO at the time. Since then, the company’s stock has been on a free fall as investors raised concerns over the company’s monetisation and profitability plans.
Also Read | Paytm stock could turn multibagger in coming years, says analyst
--- ENDS ---
Published On:
Jan 12, 2023
