Paytm share price: Paytm parent One97 Communications' shares gave up initial gains on Tuesday, extending losses to a second straight day following some recovery on Friday. Last week, the stock hit a series of lows to slide below the Rs 1,000 mark for the first time ever. The Paytm stock had begun trading on BSE and NSE in November 2021.
Paytm parent One97 Communications' shares succumbed to selling pressure yet again, dropping below the Rs 1,100 mark on Tuesday. The stock continued to decline for a second straight session, following a recovery of eight percent on Friday.
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The Paytm stock ended at Rs 1,042.5 apiece on BSE, down 5.7 percent for the day. At this level, One97 shares are available at a discount of 51.5 percent to the issue price of Rs 2,150.
The sustained weakness in Paytm shares comes despite the digital payments company reporting a four-fold jump in loan disbursals to Rs 2,180 crore in Q3.
In a business update on January 10, the company said its gross merchandise value (GMV) came in at Rs 2.5 lakh crore in the December quarter, as against Rs 1.12 lakh crore in the year-ago period.
Most analysts are suggesting avoiding a fresh entry in the stock.
AK Prabhakar, Head of Research at IDBI Capital Markets, advises caution on Paytm shares for now. "On new listing, one always has to be careful... One97 is a loss making company and we do not know when the turnaround would happen," he told CNBCTV18.com.
"It is safer to wait for more clarity and more management interaction before taking a fresh entry," he said.
Speaking at an event last week, Paytm Co-Founder Vijay Shekhar Sharma said the company's IPO came at a time when global markets were already risk-averse due to a confluence of factors, which affected its performance.
In their more than eight-week-long journey in the secondary market so far, Paytm shares have failed to trade at a premium over the issue price.
Paytm shares debuted on stock exchanges BSE and NSE on November 18 at a discount of around nine percent to the issue price.
A number of brokerages are skeptical on the stock. Last week, Macquarie maintained its 'underperform' rating for Paytm, reducing its target price by 25 percent to Rs 900.
Paytm's IPO, the biggest of all time in India, saw an overall subscription of 1.9 times the equity on offer. Though fully subscribed, the IPO failed to receive the kind of response enjoyed by most public offers in 2021.
Paytm is yet to report its financial results for the quarter ended December.
For the second quarter of FY22, Paytm reported an 8.5 percent increase in net loss on a year-on-year basis to Rs 473 crore. Its revenue, however, rose 63.6 percent to Rs 1,086.4 crore.
First Published: IST