Paytm Shares Tank 5% After 2.5% Shares Change Hands in Block Deal; Details

Paytm Share Price: Shares of One 97 Communications, the parent company of Paytm, slipped nearly 5 per cent following a huge block deal. Around 1.6 crore shares or 2.56 percent stake of the company worth Rs 1,441 crore changed hands at an average price of Rs 884 a share, CNBC-TV18 reported.

Details of the buyers and sellers were not known immediately.

The stock hit a low of Rs 880 a share and declined as much as 4.6 percent intraday. At 10.20am, the scrip was trading at Rs 898 a share, down 2.7 percent from its previous close.

Recent RBI regulations impacting consumer lending norms have brought Paytm into focus. CLSA analysts believe this may affect fintech intermediaries like Paytm, but the impact might not be significant. Jefferies suggests that tightened norms and raised interest rates by banks could affect Paytm’s earnings due to possible partner restrictions.

Additionally, Paytm’s inclusion in the MSCI Global Standards Index has drawn attention, with IIFL Alternative Research estimating potential inflows of around $140 million, while Nuvama Alternative and Quantitative Research anticipates inflows worth $162 million into the stock.

In 2023 so far, shares of Paytm have gained over 68 per cent against the Nifty50’s rise of over 8 per cent.

In its October 18 coverage report, Jefferies initiated a ‘buy’ on Paytm shares for a target price of Rs 1,300 apiece.

The brokerage believes the payment company will turn profitable in the next four quarters, led by substantial growth in the credit business and monetisation.

“In the next four quarters, Paytm will turn profitable and be among the few large profitable fintechs globally that enjoy strong growth (>30 per cent), double-digit EBITDA margins, and stable profitability.

However, its valuations at 3.6x FY25 EV/revenue remain at a nearly 40 per cent discount to this group,” Jefferies said.

After the Q2 result announcement, CLSA maintained a ‘buy’ on Paytm and raised the target price to Rs 1,200.

Citi raised the target to Rs 1,300 from Rs 1,160, and Morgan Stanley maintained an equal-weight rating on the counter with a target price of Rs 830.