Paytm shares in news as Antfin likely to sell 3.6% stake via block deal today

Shares of One 97 Communications Ltd (Paytm) will be in focus on Friday morning amid reports Jack Ma-founded Antfin (Netherlands) Holdings was looking to offload another 3.6 per cent stake in the online payment company via block deals. As per reports, the floor price for the deal is likely to be at Rs 880 per share, a discount of about 3 per cebt to Thursday's closing price of Rs 904.40.

Paytm was recently in news after its Founder and CEO Vijay Shekhar Sharma entered into an agreement with Antfin (Netherlands) Holding BV to purchase 10.30 per cent stake in the new-age company through his 100 per cent owned overseas entity – Resilient Asset Management B.V. With this, Antfin ceased to be the largest Paytm shareholder.

With the transaction, Sharma shareholding in Paytm increased to 19.42 per cent directly and indirectly, whereas Antfin’s shareholding got reduced to 13.5 per cent.

Friday's block deal would, thus, mean Antfin 's stake in Paytm may drop to single digits. Antfin owned 23.79 per cent stake in Paytm at the end of the June quarter.

Analysts are though positive on Paytm's prospects. Bernstein this week initiated coverage on Paytm with a 12-month target price for Paytm at Rs 1,100, which was at 8 per cent premium over the consensus estimate of Rs 1,018. Paytm's early signs of an edge in digital lending, achieved by leveraging its dominant digital payments platform, puts it on the right side of the disruption, Bernstein said.

Bernstein said while it's too early to declare winners in the digital lending space, it finds Paytm -- a dominant digital payments platform with a promising head start in the lending business -- to be on the right side of the disruption.

"We expect its loan disbursal volumes to grow sharply and achieve a market share of 4 per cent by FY26E (in high-yield (>13 per cent interest rate) household lending segment). And with stabilising margins in its payments segment, we expect the business to breakeven by FY25E and generate an EPS of Rs 130 by FY30E," it said.

The average target price on Paytm, as per Trendlyne, suggests 15 per cent potential upside.