Paytm update: Paytm stock soars by 9% today!

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Buying was seen in Paytm stock today as it surged 13% intraday, its biggest gain in the last 3 months. As per experts, the stock may be looking attractive at current levels to many investors and hence the rally.

The Paytm stock has been in the news since its listing in November 2021. Paytm's issue price was Rs 2150, and this week it hit a low of Rs 521. The stock is down more than 70% from issue price. Let us look at all the developments in the last one week.

Macquarie slashes Paytm's target price

  • Macquarie, a global financial major, started coverage on Paytm in November last year and gave the target price of Rs 1,200. It was days after the listing when the stock was trading around 1800 levels.
  • Last month, Macquarie had slashed Paytm's target price to Rs 700 per share. The firm has now cut the target price further. Last week, it revised the target to Rs 450 per share.
  • In a statement, it said that recent developments significantly reduce the probability of getting a banking licence to lend. RBI’s regulations on digital payments and BNPL (Buy Now Pay Later), and stricter KYC and compliance norms will all be adverse developments for fintech companies in general, potentially bringing down unit economics and/or growth.

BSE seeks clarification

  • The BSE asked for clarification from One 97 Communications over the sharp fall in its share prices on 21st March.
  • The clarification is requested to ensure that investors have the latest relevant information about the company and to inform the market so that the investors' interest is safeguarded.

Paytm’s response 

  • On 23 March, One 97 Communications provided the clarification.
  • It said that the company has been complying with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).
  • It has from time to time made all necessary disclosures to the Stock Exchanges within the stipulated timeline.
  • The company added, "The company would also like to point out the business fundamentals remain robust as demonstrated in our last earnings release dated February 4, 2022."

Brokerage view (Dolat Capital): As per the brokerage firm, it sees an exceptional growth in the stock price. Paytm is trading at a modest 3.6x on FY23E revenues and offers traditional business kind valuations despite its hyper-growth and inclusion-led scalable business opportunity for investors. They have given a BUY rating on the stock with DCF based target price of Rs 1,620 implying 9x/7x on its EV/Rev in FY24/FY25E.

According to Bloomberg, the firm has four buys, two holds and three sells rating on the stock. The stock rose by 9% on Thursday to end at Rs 571.4.