Paytm shares slip 5% to trade below Rs 400 mark; here's what current tech charts indicate

Shares of One 97 Communications Ltd, Paytm's parent, extended their fall for the third straight session in Thursday's trade. The stock fell 5 per cent to hit a day low price of Rs 385.85. At this juncture, the stock has crashed 61.35 per cent from its one-year high value of Rs 998.30, a level seen on October 20 last year. Although, the counter has rebounded 21.20 per cent compared to its 52-week low price of Rs 318.35, hit earlier this month on February 16.

Japan-based SoftBank Group has further reduced its stake in fintech giant to 2.83 per cent from 5.01 per cent earlier, BSE data stated.

Earlier this week, the embattled digital payments firm said CEO Vijay Shekhar Sharma would step down as non-executive chairman and board member of Paytm Payments Bank.  Sharma owns a 51 per cent stake in Paytm Payments Bank. And, One 97 Communications owns the rest.

Brokerage Macquarie Paytm's founder Sharma is trying to salvage some value from Paytm Payments Bank by sending a message to the regulator that he is willing to give up control.

Reserve Bank of India (RBI) had asked Paytm's payments bank unit to wind down operations by March 15 due to persistent compliance issues and supervisory concerns, triggering a meltdown in Paytm's stock.

Technical analysts suggested that the stock looked weak on charts. Next visible support will be at Rs 380.

"Support will be at Rs 380 and resistance at Rs 405. A decisive close above Rs 405 level may trigger a further upside till Rs 420. Expected trading range will be between Rs 365 and Rs 430 for a month," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

"Paytm looks bearish on daily charts with strong resistance at Rs 438. A daily close below Rs 358 could lead to a downward target of Rs 318 in the near term," said AR Ramachandran from Tips2trades.

"The stock looked weak on charts and may slip towards Rs 320 level in the near term. On the higher side, resistance will be at Rs 420," said DRS Finvest founder Ravi Singh.

The counter was trading lower than the 5-day, 20-, 30-, 50-, 100-, 150- and 200-day simple moving averages (SMAs) but higher than the 10-day SMA. The counter's 14-day relative strength index (RSI) came at 45.30. 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 23.16 against a price-to-book (P/B) value of 2.08. Earnings per share (EPS) came at (-)17.54 with a return on equity (RoE) of (-)8.97.

Bourses BSE and NSE have put the securities of Paytm under the long-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.

(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.)