Paytm’s (One 97 Communications Ltd) shares slumped to reach a 52-week low of ₹ 483.20 apiece on Wednesday. Its shares have lost 18.26% in the past five days. While SoftBank divested a stake, three FPIs bought a stake. This buoyed its share price. However, its shares are reeling under pressure again.
The digital payments giant’s shares have remained under the hold of bears since its listing. It had an upper price band of ₹ 2150.00 and its shares were trading at ₹ 496.65 apiece at 11:34 AM on Wednesday, implying a decline of 76.9% since its IPO. However, brokerages are bullish on the stock and their targets indicate that the scrip can deliver multibagger returns from this point.
ICICI Securities
ICICI Securities has maintained a ‘Buy’ rating on the stock with a target price of ₹ 1,285 apiece, based on customer lifetime value methodology, according to its report dated November 09, 2022. This translates to an upside of 158.49% as compared to its share price.
The brokerage highlighted that Paytm continues to improve its revenue and margin profile and its consolidated net loss has narrowed quarter-on-quarter from ₹ 645 crores in June 2022 to ₹ 572 crores in September 2022.
Lower processing charges, sharp acceleration in lending business, lower indirect costs, sustained growth in monthly transacting users (MTUs), deployment of offline devices and continued build-up of gross merchandise value (GMV) were major contributors.
JP Morgan
JP Morgan has upped Paytm’s target from ₹ 1,000 to ₹ 1,100 and has maintained an ‘overweight’ rating. The revised target price suggests an upside of 121.49% from its current share price.
In a note, JP Morgan said that Paytm is the leading ‘fintech horizontal’ in India, having built more sources of monetisation across payments, commerce and financial services than all of its competitors. It sees Paytm retaining the highest revenue and profit levels among local vertical and global horizontal peers.
Recent Deals
On November 17, 2022, SoftBank divested a 4.5% stake in the fintech company for ₹ ₹1,631 crores. However, its shares were trading in the green buoyed by three bulk deals on that day.
According to the bulk deals data available on the National Stock Exchange (NSE), Bank of America (BofA) Securities, Morgan Stanley Asia Singapore and Societe Generale are among the FIIs who have bought shares in the company. However, SVF India Holdings (Cayman) pared its stake.
Bank of America (BofA) Securities procured 50,26,428 shares of the company at an average price of ₹ 555.00. Therefore it has invested ₹ 278.96 crores (₹ 2,78,96,67,540).
Morgan Stanley Asia Singapore bought 60,03,468 shares, paying ₹555.00 per share. Therefore it has invested ₹ 333.19 crores (₹ 3,33,19,24,740).
Societe Generale picked 70,85,227 shares of Paytm, at ₹ 555.00 apiece. Hence, it invested ₹ 393.23 crores (₹ 3,93,23,00,985) in the company’s shares.
However, SVF India Holdings (Cayman) offloaded 2,93,50,000 shares at ₹ 555.67 per share. This means that it has booked profits by selling Paytm’s shares worth ₹ 1630.89 crores (₹ 16,30,89,14,500).
Written by Simran Bafna
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