Founder & CEO of Paytm Vijay S Sharma buys shares worth Rs 11 crore in One97 Communications

NEW DELHI:  Vijay Shekhar Sharma has purchased 1.72 lakh shares worth Rs 11 crore in One97 Communications, the parent company of fintech firm Paytm. Sharma, who is the managing director of the company, purchased 1,00,552 shares worth Rs 6.31 cr on May 30, and on May 31 he added 71,469 shares, aggregating to Rs 4.68 cr, as per a regulatory filing.  

As the reports of his share purchase came, stock of Paytm witnessed a sharp jump and closed 2.63% higher on Friday at Rs 629. In the past five sessions, Paytm, which has fallen nearly 60% since its listing in November, has gained 8% even as benchmark Sensex and Nifty have fallen merely 3%.

As per the norms, Sharma was not allowed to buy shares in One97 for at least 6 months since he was selling shareholding in the public offering (IPO). However, with that restriction now over, Sharma, who believes that they achieve operating EBITDA (EBITDA before ESOP cost) break-even in the next 6 quarters, purchased Paytm shares. Paytm logged an 89% year-on-year (YoY)jump in revenue in the fourth quarter of FY22 at Rs 1,541 cr, while the contribution profit grew 210% YoY to Rs 539 crore. However, its net loss widened to Rs 761.4 cr in Q4FY22 compared to Rs 441.8 cr in the same quarter last year.

Analysts at ICICI Securities in a recent note said they remain conservative and expect the company to be EBITDA-positive by FY25E. “Maintain BUY with an unchanged target price of Rs 1,285 based on customer lifetime value methodology,” they said. Global brokerages such as Goldman Sach said Paytm’s growth momentum for financial services and cloud businesses remain robust.  “All this while cash burn has been improving, and the company reiterated its guidance of adjusted Ebitda breakeven by September 2023, which we see as a key catalyst for the stock,” said analysts at Goldman Sachs.