Paytm says biz fundamentals robust; stock jumps 3%

Shares of Paytm jumped 3 per cent to hit an intraday high of Rs 562 after the company clarified that its business fundamentals remain robust and that they have no information that may have a bearing on its share price. 
 
The stock opened 1 per cent higher at Rs 550.20 against the previous close of Rs 543.90 on BSE. With a market capitalisation of Rs 35,344 crore, the shares stand lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
 
On Tuesday, the shares plunged over 4 per cent to hit an all-time low of Rs 541.15 on BSE. The stock is down over 70 per cent when compared to an all-time high of Rs 1961 it touched in November last year on the day of its debut.
 
Global financial major Macquarie slashed its price target for Paytm citing regulatory headwinds including a falling probability of getting a banking licence.
 
This is the second time that the global brokerage firm has slashed its target for Paytm. It initiated coverage on the stock in November last year with a target price of Rs 1,200, which was cut to Rs 700 last month and now has been further slashed to Rs 450 per share.
 
However, brokerage firm ICICI Securities has a 'Buy' rating on the stock with a target price of Rs 1,285 per share.
 
"We were estimating Paytm’s consumer base to grow by 10 per cent in FY23E and monthly transacting users to increase at >25 per cent run-rate. The company will have to increase its efforts to enhance engagement with the existing user base to offset the adverse impact of the embargo on new users," it said.
 
"Now, expecting moderation in the onboarding of new users and the adverse impact on incremental payment revenue (as wallets are key monetisable payment instruments), we revise our target price to Rs 1,285 (earlier Rs 1,352). Also, it may defer Paytm Payments Bank’s plan to apply for conversion into a small finance bank (though eligible to apply from May 22)," ICICI Securities added.
 
The Bombay Stock Exchange, on Tuesday, sought clarification from the company with reference to the “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,” it said in a notification.
 
One97 said that the company has been complying with SEBI regulations and has made all necessary disclosures to stock exchanges.
 
“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. The Company would also like to point out the business fundamentals remain robust as demonstrated in our last earning release dated February 04, 2022,” it clarified.