Shares of One97 Communications, the owner of Paytm brand, hit lifetime low as it plunged as much as 5 per cent in a weak market on Wednesday.
The stock has been in a declining trend for a while now. It has closed in the red 11 times in the last 12 sessions, declining 26 per cent in the process. The scrip has fallen about 54 per cent from the IPO price.
In the past 12 sessions, the digital payments stock has plummeted 26%. While tanking about 54% from its issue price of Rs 2,150. Paytm was listed on November 18, 2021, and was the biggest public issue on Dalal Street. Ever since its public listing in two months, the stock has not once posted a profit.
The stock is now even closer to the most bearish target price of Rs 900 on the counter. It is set by Macquarie analysts, who also set the tone for Paytm’s initial fall when the stock got listed on exchanges. Analysts believe recent indications that the US Federal Reserve may increase interest rates earlier than had been foreseen have impaired the valuations of new age/tech companies across the globe.
“Fed tightening and increased tapering are definitely playing out on high valuations. The biggest effect has come on some of the new age, new tech companies in the US and also in India” analyst says.
Investors sentiment was down after recent downgrades by foreign securities firms have dampened sentiment among investors. Macquarie Research retained its underperform rating. But cut its target price by 25 percent on Paytm to Rs 900 from Rs 1,200 earlier.
The company recently said it has seen “stellar” growth in its lending business. Paytm CEO Vijay Shekhar Sharma also said the market was underestimating the company’s payments business.
Last week, Paytm said that it is wrapping up its Canada consumer app from March 14. It had disabled scheduled payments and top-ups for Paytm cash including EMT transfers, Canada Post and transfers from January 14. However, the company clarified that the Paytm Canada consumer app is not material to its overall business, and contributed only 0.1 per cent to the company’s revenues.
Company Financials
The company recorded over 4-fold jump in loan disbursals during the October-December 2021 period with 44 lakh loans worth ₹2,180 crore disbursed from its platform as against 8.81 lakh loans worth ₹470 crore in the year-ago period.
During the quarter ending September, Paytm’s net losses increased marginally to ₹473.5 crore from from ₹436.7 crore in the year-ago quarter. Its revenue from operations grew 64% year-on-year (YoY) to ₹1,090 crore. The company is yet to release its earnings for the third quarter (Q3FY22).
Paytm is yet to report its financial results for the quarter ended December.
