Paytm shares hit 52-week high as Singapore arm okays stake sale in Japan's PayPay Corp

Shares of One 97 Communications Ltd (Paytm's parent) on Friday surged 3.60 per cent to scale their one-year high value of Rs 990.90. The stock eventually settled 2.02 per cent up at Rs 975.80. At this price, it has gained 50.99 per cent on a year-to-date (YTD) basis compared to a 13.06 per cent rise in benchmark BSE Sensex during the same period.

Today's upmove in the share price came after it was reported that the domestic fintech player may offload a "stake in Japan's PayPay to SoftBank for $250 million." Bourses BSE and NSE sought clarification from Paytm over the same report. "The exchange has sought clarification from One 97 Communications Ltd on December 6, 2024, with reference to news quoting 'Paytm to sell stake in Japan's PayPay to SoftBank for $250 million.' The reply is awaited," the digital payments firm stated in a BSE filing.

The company, in response, said, "With reference to the captioned subject, we wish to clarify that we have been informed by One 97 Communications Singapore Pvt Ltd, a wholly-owned subsidiary of the company (Paytm Singapore) at 12:49 pm (IST), that its Board of Directors at its meeting held today i.e., December 6, 2024, approved sale of Stock Acquisition Rights (SARs) in PayPay Corporation, Japan."

"The transaction is subject to the satisfactory completion of all corporate approvals, execution of transaction documents and customary closing conditions. We shall submit the necessary disclosure as per the provisions of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, within stipulated time. This transaction will increase the consolidated cash balance of the company to the extent of sale consideration to be received by Paytm Singapore," it added.

Paytm's stock saw high trading volume on BSE today as around 7.77 lakh shares changed hands. The figure was higher than the two-week average volume of 6.65 lakh shares. Turnover on the counter came at Rs 75.21 crore, commanding a market capitalisation (m-cap) of Rs 62,171.91 crore.

Technically, the scrip traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The stock's 14-day relative strength index (RSI) came at 72.74. A level below 30 is defined as oversold while a value above 70 is considered overbought.

"Immediate resistance for Paytm could be seen at Rs 1,000. A decisive breach above the said resistance zone can trigger a further upside towards Rs 1,400-1,500 levels," Kkunal V Parar, Vice-President of Technical Research and Algo at Choice Broking, told Business Today.

As per BSE, the company's stock has a negative price-to-equity (P/E) ratio of 73.98 against a price-to-book (P/B) value of 4.75. Earnings per share (EPS) stood at (-)12.93 with a return on equity (RoE) of (-)6.42.

On the earnings front, Paytm posted its first-ever quarterly profit since listing during the September 2024 quarter. The fintech company's profit came at Rs 928.3 crore in the second quarter (Q2 FY25) as against a record loss of Rs 838.9 crore in the previous quarter (Q1 FY25). Paytm had reported a loss of Rs 290.5 crore in Q2 FY24.

The digital payment firm recorded an exceptional gain of Rs 1,345.4 crore due to the sale of its ticketing business. Paytm sold the mentioned business to online food aggregator Zomato earlier in August this year.

Meanwhile, Indian equity benchmarks settled slightly lower today, pausing their five-day winning streak after the Reserve Bank of India (RBI) decided to keep repo rate unchanged at 6.5 per cent. The domestic indices were dragged by technology, pharma and select banking stocks.