Retail investors, mutual funds, FPIs repose faith in Paytm. Stock worth a revisit?

In a quarter marred by the Reserve Bank of India (RBI) ban on Paytm Payments Bank Ltd (Paytm) services, mutual funds (MFs) and foreign portfolio investors (FPIs) reposed faith in One 97 Communications Ltd (Paytm), as they upped stakes in Vijay Shekhar Sharma-led company despite a 37 per cent steep fall on the stock this past quarter, data compiled from BSE showed. 

Data showed domestic funds upped stake in Paytm by 1.17 percentage points or 6.15 per cent in the March quarter against 4.99 per cent in the December quarter, with buying seen from Mirae Mutual Fund and Nippon India Mutual Fund. 

In the case of FPIs, they owned 20.64 per cent stake in the company at the end of March quarter against 18.64 per cent in the December quarter, up 2 per cent. The FPI holding in the bank fell 5.31 percentage points to 39.77 per cent from 45.08 per cent, following the SoftBank stake sale. SVF India Holdings (Cayman) (SoftBank) held 1.4 per cent as on March 31 against 6.46 per cent at the end of December quarter.                                                                                                                                                

The retail holding in Paytm -- investors holding up to Rs 2 lakh worth shares, also rose 1.68 percentage points to 14.53 per cent from 12.85 per cent sequentially.

On January 31, the apex bank had ordered Paytm Payments Bank to shut most of its operations, including deposits, credit products and digital wallets due to its “persistent non-compliance”. The National Payments Corporation of India (NPCI) recently allowed Paytm to participate in UPI as a Third-Party Application Provider (TPAP) under multi-bank model.

Fresh data showed, Paytm's UPI market share had fallen to 9 per cent in March. This was the lowest market share it has in the last four years.

Brokerage Motilal Oswal is expecting Paytm to report a net loss of Rs 469.30 crore for the March quarter, as operating profitability takes hit due to the RBI’s ban on Paytm Payments Bank (PPBL).

The firm's market share dropped to 9% in March from 11% in February, a recent data available on the National Payments Corporation of India (NPCI) website stated. The Noida-based fintech major processed around 1.2 billion UPI transactions in March, down from 1.3 billion transactions in February, and 1.4 billion in January.