Paytm’s shares hit the upper circuit for the second straight day on Thursday (May 30), gaining 5% from the previous close to touch INR 377.50
The shares of the company have been on a revival streak this week after a sharp decline owing to a lackluster Q4 FY24 performance
The recent upsurge comes after the company denied reports of stake acquisition by the Adani group
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Shares of One 97 Communications, the parent entity of fintech major Paytm, touched upper circuit for the third day in the week.
The company’s shares hit the upper circuit for the second straight day on Thursday (May 30), gaining 5% from the previous close to touch INR 377.50 during intra day trading.
On Wednesday, the company’s shares hit an upper circuit of INR 359.55.
For the uninitiated, upper circuit refers to the maximum price a stock can reach on a given trading day.
The fintech major’s stock resurgence has been a constant theme throughout the week. The stock first jumped as much as 4.9% to INR 356.55 on May 27.
The recent upsurge comes after the company denied reports of stake acquisition by the Adani group.
In a notice sent to the BSE, the company dismissed ToI’s report which claimed that the fintech major’s founder and CEO met Vijay Shekhar Sharma with Adani Group’s head Gautam Adani at his office to finalise the deal.
Despite the uptick, the company’s stock prices today are a far cry from its 52-week high of INR 998.50.
Owed to harsh business cuts it underwent due to regulatory challenges this year, its stock has declined by nearly half on a year-to-date (YTD) basis.
The decline can be broadly attributed to have come in two tranches. The first major setback for the Vijay Shekhar Sharma-led company came back in January, when the Reserve Bank of India (RBI) barred its Paytm Payments Bank (PPBL) from accepting deposits, processing UPI payments and other services due to persistent non-compliances and material supervisory concerns.
Following the regulatory imposition, the stocks plunged from INR 761 on January 31 to INR 438.35 on February 5.
The second dent came when the exact extent of damages inflicted by the aforementioned challenges were disclosed to the public.
On May 22, the company disclosed that its losses widened by over 3X on an year-on-year basis to INR 550.5 Cr in the quarter ending on March 31 (Q4) of the financial year 2023-24 (FY24) from INR 167.5 Cr reported in the year-ago period. The shares declined 3% and 4% respectively over the next two days.
Despite the negative trends of the stock, brokerage firm YES Securities was bullish on the stock’s resurgence. It gave the fintech major’s shares a ‘buy’ rating along with a PT of INR 450, observing some upturn in its payments business.
“After being under pressure, the merchant payments business started to grow in April and May. On the other hand, monthly transacting users, which drive consumer payments business, are down 25% compared with January. April was the worst month for MTUs but this has stabilised in May. MTU growth will happen once the TPAP commencement happens,” it said.
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