Paytm shares crash 50% so far this year; here's what analysts say

Shares of One 97 Communications Ltd, Paytm's parent, have cracked 49.69 per cent on a year-to-date (YTD) basis. The stock today plunged 5 per cent to hit a one-year low of Rs 325.25. The circuit filter for Paytm's stock has been revised lower to 5 per cent from 10 per cent earlier. Prior to this, exchanges had reduced the circuit limit to 10 per cent from 20 per cent following the steep volatility on the counter in the wake of Reserve Bank of India (RBI) restrictions on Paytm Payments Bank.

Paytm's counter has been under tremendous pressure since the Reserve Bank announced restrictions on Paytm Payments' operations amid persistent non-compliances and continued material supervisory concerns.

Analysts largely gave a cautionary view on the counter. "Wait for some clarity. The stock will possibly be driven by market rumours. So, wait for the dust to settle down," Gaurang Shah, Senior VP at Geojit Financial, told Business Today TV.

"Paytm's stock has tanked drastically in the last two weeks and the overall trend turned very weak. With a bearish view maintained, we expect a further slide in the coming days. Next support is placed near 302 levels. For the bias to improve to some extent from current levels, the stock would need to decisively breach above the Rs 430 zone to establish some conviction. As of now, with a word of caution, one can stay away from this stock till any significant confirmation of revival is established," said Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher.

Retail investors can avoid this stock at this moment due to high volatility, said Rajesh Palviya, Head Technical Research at Axis Securities.

Paytm and its banking arm Paytm Payments have been receiving notices and requests for information with respect to customers of the respective entities, an exchange filing by the company said.

"One 97 Communications Ltd, its subsidiaries and its associate, Paytm Payments Bank Ltd, have over time been receiving notices and requisition for information, documents and explanations from the authorities, including Enforcement Directorate (ED), with respect to the customers that may have done business with the respective entities, and provided the required information, documents and explanations to the authorities," Paytm stated.

Bourses BSE and NSE have put the securities of Paytm under the short-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

On BSE, around 10.99 lakh shares were last seen changing hands today. The figure was lower than the two-week average volume of 15.80 lakh shares. Turnover on the counter came at Rs 36.14 crore, commanding a market capitalisation (m-cap) of Rs 20,658.17 crore.

The counter was trading lower 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 80.39. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 8.19 against a price-to-book (P/B) value of 3.01.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

Also read | Stock recommendations by analyst for February 15: GAIL, PNB and Axis Bank

Also read | MRPL, OIL, HPCL, BPCL, GAIL shares rise up to 18%; RIL down even as oil & gas index lead sectoral gainers