Shares of One 97 Communications Ltd, Paytm’s parent, extended their fall for the third straight session in Monday’s trade. The stock today dived 3.70 per cent to hit a day low price of Rs 866.05 over its previous close of Rs 899.30. At today’s low price, the scrip was down 7.77 per cent from its 52-week high of Rs 939, a level seen last Friday (August 25). Although, it recovered some lost ground was last seen trading 1.66 per cent lower at Rs 884.40.
The counter witnessed selling pressure following a stake sale by a Chinese tech giant. Antfin (Antfin Netherlands Holding BV) has sold around 2.28 crore shares or a 3.59 per cent stake through a block deal at an average price of Rs 895.20 each.
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That said, BSE data showed that Societe Generale and Morgan Stanley Asia Singapore PTE have picked up 59.87 lakh and 39.96 lakh shares of the firm at the same average price of Rs 895.20 apiece, respectively.
Earlier this month, Paytm said CEO Vijay Shekhar Sharma would buy a 10.3 per cent stake held by Antfin. This made him Paytm’s single largest shareholder.
Antfin is the Netherlands-based arm of Chinese fintech giant Ant Financial. The company, whose stake in Paytm fell to 13.49 per cent after the deal, could further reduce its stake to under 10 per cent. Antfin’s reducing stake comes after China’s Alibaba sold its entire stake in Paytm earlier in February this year.
In addition, Japan’s Softbank Group has also been cutting its stake in Paytm through open market deals, with its holding down to 9.18 per cent.
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Brokerage view
Bernstein has initiated coverage on One 97 Communications Ltd (Paytm) with an ‘Outperform’ rating. Paytm’s early signs of an edge in digital lending, achieved by leveraging its dominant digital payments platform, puts it on the right side of the disruption, the foreign brokerage stated.
It has assigned a 12-month target price of Rs 1,100 for Paytm. “We expect its loan disbursal volumes to grow sharply and achieve a market share of 4 per cent by FY26E (in high-yield (>13 per cent interest rate) household lending segment). And with stabilising margins in its payments segment, we expect the business to breakeven by FY25E and generate an EPS of Rs 130 by FY30E,” Bernstein said.
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Technical view
The counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs). The counter’s 14-day relative strength index (RSI) came at 59.81. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a negative price-to-equity (P/E) ratio of 36.54 against a price-to-book (P/B) value of 4.64.
The scrip has an analyst target price of Rs 1,041, Trendlyne data showed, suggesting a potential upside of 18 per cent. It has a one-year beta of 0.76, indicating low volatility on the counter.
Meanwhile, Indian equity benchmarks were trading higher today, led by gains in automobile, state-owned banks, metal and pharma stocks.
