Paytm Stock Continues Slide, Hits Sub-Rs 350 Level On NSE

Paytm, the digital payments giant, witnessed another day of sharp decline as its shares fell by 5% in Tuesday's trading session, marking the ninth consecutive session of losses on the National Stock Exchange (NSE).

Shares of Paytm plunged 4.99% to Rs 334.15 on the BSE.

The stock has endured a significant 13% plunge over the nine-session period. Within the past month, there have been only two instances where the stock managed to settle higher on a closing basis.

On Tuesday, Paytm shares hit the lower circuit limit at Rs 333.85 on the NSE, reflecting investor concerns. Adding to the turbulence, Paytm announced a pivotal organisational restructuring, with President and Chief Operating Officer Bhavesh Gupta transitioning to an advisory position. The company stated that Gupta's resignation, tendered on May 4, 2024, had been accepted, and he would be relieved from his duties by the end of business hours on May 31, 2024.

This downturn in Paytm's fortunes has been a protracted one, with shares plummeting by 62% over the past six months, largely attributed to the Reserve Bank of India's (RBI) ban on Paytm Payments Bank's services. In February, brokerage firm Macquarie slashed its target price on Paytm from Rs 650 to Rs 275, citing the imminent risk of customer exodus, which could severely undermine the company's monetization efforts and its overall business model.

However, amidst the turmoil, there are signs of confidence from institutional investors. Mutual funds (MFs) and foreign portfolio investors (FPIs) have increased their stakes in the Vijay Shekhar Sharma-led company during the March quarter. Data reveals that domestic funds raised their stake in Paytm by 1.17 percentage points to 6.15% in the March quarter, compared to 4.99% in the preceding quarter, with notable buying activity observed from Mirae Mutual Fund and Nippon India Mutual Fund. FPIs also showed their support, with their stake in the company rising to 20.64% at the end of the March quarter, up from 18.64% in the previous quarter, representing a 2% increase.

In a bid to revive investor sentiment, Paytm received approval from the National Payments Corporation of India (NPCI) on March 14 to onboard as a third-party application provider (TPAP) on the multi-payment service provider API model. Paytm has expedited its integration efforts with leading banks, including Axis Bank, HDFC Bank, State Bank of India (SBI), and YES Bank, aiming to streamline the transition process for user accounts to these banks. The company has commenced the migration of '@paytm' handle users to these banks, ensuring seamless UPI payments, as highlighted in a recent statement by Paytm.

Despite the current challenges and market turbulence, Paytm remains committed to navigating through these headwinds, leveraging its strategic partnerships and technological innovations to regain investor confidence and drive sustainable growth in the long run.

Paytm acts as a payment gateway, allowing users and merchants to make secure payments using cards, bank accounts, and other e-wallets. Paytm also offers a variety of payment options, including cellphone recharges, bill payments, cinema tickets, taxi, train, and aeroplane tickets, loan repayments, insurance, forex, and more.