Paytm Share Price Hits Rock Bottom, Anchor Investor Makes Surprise Exit; What Next For Paytm?

Paytm has become a household name in India. It is India’s leading financial services company that offers full-stack payments & financial solutions to consumers, offline merchants, and online platforms. One97 Communications Limited that owns the brand Paytm is founded by Vijay Shekhar Sharma. The company is headquartered in Noida, Uttar Pradesh.

Despite being well funded by marquee investors, last year company’s IPO had received a lukewarm response at the share market. And still, it has been able to catch up with the ongoing share market fervent. And recent news is also indicating that the company’s hay days are far ahead.

Paytm shares nosedived as HDFC mutual fund reduced its holding

Shares of One 97 Communications (owner of the Paytm brand), fell sharply by over 6 percent on Monday to hit its all-time low of Rs 1,151 before closing at Rs 1,157.9. The shares of the came under pressure as the news of HDFC Mutual fund, one of the four mutual funds that were anchor investors in its IPO significantly reduced its holding of Paytm across two schemes in the month ended December 2021.

The company has lost 13 percent since December 31, 2021. While MFs held 0.81 percent in the company as of November 17, 2021, disclosure of reduction in holding by HDFC Mutual fund in the company, weakened sentiment. When the fund manager believes the stock may continue to trade low over the near to mid-term, they book losses and exit. Macquarie cut its price target by 25 percent to Rs 900 from around Rs 1,200, retaining its ‘underperform’ rating.

Paytm responded by highlighting its good performance

It should be noted that the number of loans disbursed through the Paytm platform rose 401 percent year-on-year to 4.4 million loans in the third quarter of FY 2022. “In Q3FY22, the value of loans disbursed via our platform during the quarter was Rs 2,180 crore (run-rate of $1.2 billion), an increase of 365 percent. We have seen stellar growth in lending products,” Paytm said in a statement.

Paytm has been backed by investors such as Softbank, Ant Financial, AGH Holdings, SAIF Partners, Berkshire Hathaway, T Rowe Price, and Discovery Capital.