Paytm Shares Drop Amid Block Deal and Regulatory Changes

Paytm Shares Drop Amid Block Deal and Regulatory Changes

VoM News Desk | November 24, 2023 | 12:20 PM IST | Breaking News | Follow on Google News

Paytm Shares Drop Amid Block Deal and Regulatory Changes

Paytm Shares Drop Amid Block Deal and Regulatory Changes

Paytm’s stock experienced a significant drop in early trading on Friday, with shares falling over 4% following a large block deal and amid evolving regulatory scenarios.

The shares of One 97 Communications, Paytm’s parent company, declined by up to 4.63% to ₹880.00 on the BSE. This fall is attributed to a major block deal involving around 1.6 crore shares, or 2.56% of the company’s equity, traded at an average price of ₹884 per share, amounting to a total deal value of ₹1,441 crore. The identities of the buyers and sellers in this transaction have not yet been disclosed.

Recent Performance and Analyst Outlook

Despite the recent drop, Paytm shares have shown considerable growth this year, with a 70% increase year-to-date and a doubling in price over the past year. This positive trend is backed by improvements in the company’s operating performance, with analysts anticipating Paytm to turn profitable in the near future. Jefferies, a foreign brokerage firm, predicts Paytm to be profitable in the next four quarters, positioning it among the few large profitable fintechs globally with robust growth and stable profitability.

Impact of RBI’s New Regulations

The Reserve Bank of India’s recent decision to increase the risk weight on consumer loans of banks and NBFCs by 25% could impact Paytm, potentially affecting loan growth and increasing costs. BofA Securities notes that personal loans may become more expensive, but expects Paytm and its NBFC partners to pass these costs to consumers. Despite these changes, BofA maintains a ‘Buy’ rating on Paytm with a target price of ₹1,165 per share.

Current Trading Scenario

As of 9:30 am, Paytm’s shares were trading at ₹901.10, marking a 2.35% decline on the BSE. This current trading pattern reflects the market’s reaction to both the block deal and the changing regulatory environment impacting fintech companies like Paytm.

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.