Paytm Shares Hit New 52-Week High After Singapore Arm Offloads Stake In PayPay

SUMMARY

Shares of One97 Communications, the parent company of fintech major Paytm, jumped over 3% during the intraday trading on the BSE to reach a fresh 52-week high at INR 1,007 apiece

The stock got a shot in the arm after the company’s subsidiary One97 Communications Singapore sold its stock acquisition rights (SARs) in Japanese digital payments firm PayPay Corporation to SoftBank’s Vision Fund 2

The transaction, set to be completed within this month, will boost Paytm’s cash reserves by INR 2,364 Cr

Shares of One97 Communications, the parent company of fintech major Paytm, jumped over 3% during the intraday trading on the BSE to reach a fresh 52-week high at INR 1,007 apiece today (December 9).

Paytm’s board approved the sale of SARs as it has created significant value for the company, the financial major said in an exchange filing last week. The transaction, set to be completed within this month, will boost Paytm’s cash reserves by INR 2,364 Cr.

SARs are options/ warrants that give the holder the right to sell securities in the issuing company. These are generally issued as part of a company’s equity-based compensation plan.

After hitting a fresh 52-week high, the stock shed all of its gains and was trading 0.3% lower at INR 973 on the BSE at 1:02 PM. The stock has ended in green in 6 out of the last 8 trading sessions and surged over 50% on a year-to-date basis.

At the time of writing, Paytm’s market capitalisation stood at INR 61,932.98 Cr (around $7.3 Bn).

Paytm has been trying to boost its cash reserves in the ongoing financial year. In August, the company sold its event and ticketing arm Paytm Insider to Zomato for INR 2,048 Cr in an all cash deal.

As of September 30, 2024, the company had a healthy cash reserve of INR 9,999 Cr.

Vijay Shekhar Sharma, founder and CEO of Paytm, is looking to strengthen the company’s bread and butter consumer payments business. In October, he said the fintech major was planning to reinvest in this segment.

Over the last few months, Paytm has rolled out a slew of new features like UPI Lite Auto Top-Ups, UPI International in select international markets and UPI Statement download option, among others.

Paytm returned to the black in the September quarter of the financial year 2024-25 (Q2 FY25), posting a consolidated profit after tax (PAT) of INR 930 Cr against a loss of INR 292 Cr in the year-ago period.

However, operating revenue declined 34% year-on-year to INR 1,660 Cr during the quarter under review.