Paytm witnesses maximum gains in four months

The Paytm stock hit a high of Rs 592.40 on BSE, up 13 percent, its maximum gains since 24 November 2021. At 12.20pm, the scrip was trading at Rs 585 on BSE, up 12 percent from its previous close.

The stock was a wealth destroyer since listing and plummeted over 70 percent from its issue price of Rs 2150. It listed on exchanges on 18 November 2021. The total mcap erosion since listing was over Rs 1 trillion.

Dolat Capital in its recent note has rated stock to buy and cut its target price to Rs 1620 from Rs 2500 a share. The brokerage firm said that the RBI's action to bar Paytm Payments Bank from accepting new customers has little impact on the firm's financials but will hurt growth confidence. The brokerage firm estimates RBIs action will dent Paytm's longer term revenue growth by about 100 basis points.

Recently brokerage firm Macquarie Research has cut its target price by 39 percent to Rs 450 a share saying investors should avoid bottom fishing in the stock.

"Globally, Fintechs have corrected sharply. When we initiated on PayTM, fintechs globally traded at 0.3x-0.5x PSg (price to sales growth ratio). However, multiples have now declined to 0.07x-0.35x. Our benchmark valuation for PayTM has been the valuation of global fintechs. As a result, we now value it at 0.2x PSg vs the 0.35x PSg used earlier, thereby arriving at a fair price of Rs450. Note that we haven't changed our earnings or revenue estimates for PayTM", said Macquarie Research report.

On 23 March, BSE sought a clarification from One 97 Communications over the sharp fall in its share prices. "The exchange has sought clarification from One 97 Communications on March 22, 2022 with reference to significant movement in price, in order to ensure that investors have latest relevant information about the company and to inform the market so that the interest of the investors is safeguarded," BSE said, adding that "the reply is awaited".

In a statement to the exchanges on March 23, One One 97 Communications clarified the BSE's query. It read: "We would like to inform you that our Company has been complying with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and have, from time to time, made all necessary disclosures to the Stock Exchanges within stipulated timeline. Further, as on date, there is no information/ announcement, which in our opinion may have a bearing on the price/ volume behaviour in the scrip of the Company and which is yet not disclosed to the Stock Exchanges."