Paytm bleeds; shares hit new all-time low! Here's what experts say

Shares of fintech major Paytm continued to bleed on Tuesday and plunged over 9 per cent to hit an all-time low of Rs 616.55 on BSE. Market cap of the firm slipped to Rs 40,273.35 crore.
 
On Monday, Bloomberg, citing a person familiar with the matter, reported that the annual inspection by the central bank had found that Paytm Payments Bank's servers were sharing information with China-based firms which indirectly own a stake in the bank.
 
However, Paytm Payments Bank rejected the media report. In a tweet, Paytm Payments Bank called the report "false and sensationalist".

"Paytm Payments Bank is proud to be a completely homegrown bank, fully compliant with RBI's directions on data localisation. All of the Bank's data resides within India," it said.
 
The stock is trading 68 per cent down from its all-time high of Rs 1,961.05. It has been on a downward trend and has tanked over 53 per cent on a year-to-date basis. The shares are trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
 
Shares of Paytm plunged over 13 per cent to hit an all-time low of Rs 672.10 on Monday after the Reserve Bank of India (RBI) asked Paytm Payments Bank to immediately stop opening new accounts amid "material supervisory concerns" observed in the bank.
 
Paytm said it has been informed that RBI's action does not impact any existing customers of PPBL, who can continue to use all banking and payment services without interruption.

"All existing users of Paytm UPI, Paytm Wallet, Paytm FASTag, and bank accounts can continue to use these instruments, including debit cards and net banking, for payments," it said.

"The bank is taking immediate steps to comply with RBI directions, including the appointment of a reputed external auditor to conduct a comprehensive system audit of its IT systems. PPBL remains committed to working with the regulator to address their concerns as quickly as possible," the company added.
 
Manoj Dalmia Founder and Director, Proficient Equities Limited said, "Reduce exposure to new age stocks like Paytm, Zomato as they faced several selling pressures from investors, the valuations they ask are huge and are based on future business scope and not on present business. One may keep a small portion allocated in these stocks and go for other established businesses in small and mid-cap sectors with a strong business framework."
 
“In the bull case, the target for the next six months is up to 920 to 1000, while in the bear case, the target is 600 to 680. These are all make-or-break stocks. If you have patience and a long-term view of more than 5 years, you can invest up to 7% of your risk capital. Yes, although not by much, usually up to 10 per cent in the near term. However, if RBI limitations stay in place for an extended period of time, this will be an issue," said Ravi Singhal, Vice Chairman at GCL Securities.
 
Ravi Singh, Head of Research and Vice President, Share India said, “Paytm's recent ban on adding new customers due to likely gaps in its technology systems is going to hurt the business sentiments. The immediate impact will be negative. However, Paytm has already onboarded a very large customer base onto the payments bank, but the ban may affect their chances of upgrading to a small finance bank. The stock may see more selling pressure and may touch the level of 500 in the medium term.
 
"The overall market is in correction mode. New-age internet stocks like Zomato, Nykaa, or Paytm are also facing massive selling pressure. This may continue for some more trading sessions. However, a buying opportunity may arise if these stocks fall another 3–5%. Investors may take a fresh entry, keeping a view of the long term."

Meanwhile, the digital payments and financial service firm said that its gross merchandise value (GMV) processed through its platform jumped 105 per cent year-on-year to Rs 1,65,333 crore in the fist two months (January and February) of the fourth quarter of the financial year 2022-2022. 

GMV is the merchant payments processed through all instruments (Paytm Wallet, Paytm Payments bank account, other banks netbanking, credit and debit cards, UPI etc).