NEW DELHI: Paytm is making a comeback on the stock exchanges after its share prices had nose-dived by around 40% in the first two trading sessions. The comeback, which has pushed its market capitalisation to over Rs 1 lakh-crore mark, is said to have happened on the back of strong buying from institutional buyers.
“Domestic Institutional investors and foreign institutional investors are buying the share price after its initial dip,” said a company source not wanting to be named. The Source added, “Many naysayers had underestimated Paytm, and the potential it holds in the Indian technology ecosystem.
Now, Paytm’s strong rally is bringing back the faith the company holds and the belief of Indian tech companies. Paytm has been the poster boy of Indian start-ups, and continues to be a leader that has popularised digital payments and financial services in India.”
Paytm’s shares could also be rising as the fintech player is holding its first board meeting after the listing on November 27. On Wednesday, Shares of One97 Communications, the parent company of Paytm, rose by 17% to Rs 1,753. According to BSE data, its m-cap stood at over Rs 1.13 lakh crore.
“This is value buying…Investors who are confident about the long-term prospects of the company can look at accumulating the stock. The stock may stabilise between 1,600 rupees and 1,800 rupees in the short term,” said Gaurav Garg, head of research at Indore-based CapitalVia Global Research. However, few analysts are still not sure if the stock will be able to sustain the momentum.
“Paytm’s value is still very high given the company would take a long time to report profit. Further, its payment business may take a hit due to increased competition coming from GooglePay and PhonePe. I expect the stock to consolidate at around Rs 1500-level in near future,” said a senior analyst of a leading brokerage house requesting anonymity.