Paytm share price rallied over 3% to hit a fresh 52-week high of Rs 938.65 on NSE after reports of a huge block deal. Around 2.3 crore Paytm shares or 3.6% stake of the company changed hands in a bunch of deals, according to reports. In the last five trading sessions, the stock of Vijay Shekhar Sharma-led fintech company has gained over 7%.
Antfin was reportedly set to sell another 3.6% shares, or 2.3 crore shares in the fintech giant via a block deal on Friday. The Jack Ma-founded Antfin (Netherlands) Holdings was poised to offload Paytm shares at Rs 880.10 apiece. After the deal, Antfin’s stake in Paytm will be reduced to 9.9%.
Earlier this month, Antfin sold a 10.3% stake to Resilient, an overseas entity that is 100% owned by Paytm founder Vijay Shekhar Sharma. With this, Sharma becomes the sole Significant Beneficial Owner (SBO) of Paytm whose current stake in the company is 19.42%. Analysts believe the reduction of Antfin’s shareholding to 9.9% and the change of Paytm’s SBO to Sharma, will remove the overhang of Chinese shareholding.
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Paytm stock has delivered multibagger returns so far this year, as the shares have rallied 72.38% in 2023. The stock has risen nearly 20% in the last one year. Paytm shares have seen positive movement in the last few sessions after foreign brokerage Bernstein initiated coverage on the stock with an 'Outperform' rating.
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. The brokerage has assigned a 12-month target price for Paytm at Rs 1,100, 8% higher than the consensus estimate of Rs 1,018 and indicates a 21% potential upside over Thursday's closing price of Rs 904.45.
In terms of technicals, the relative strength index (RSI) of Paytm stands at 63.9, signaling it's neither trading in the overbought nor in the oversold territory. The stock has a 1-year beta of 0.76, indicating very low volatility. Shares of Paytm are trading higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages.
Paytm's shares have impressively outperformed the market this year, supported by consistent revenue growth and reduced losses in recent quarters. The stock is up more than 100% from its lowest point in November 2022. Analysts predict that the company might achieve operating breakeven by mid-FY25. However, caution prevails among analysts due to the entry of Reliance Jio.
Meanwhile, higher free float and greater weightage may lead to inclusion of Paytm shares in the MSCI index. According to Nuvama Alternative & Quantitative Research's analysis, FTSE Index provider should include additional floating Paytm shares within the next 3-4 days. “This inclusion is expected to generate a passive flow (minuscule) of approximately $7 million," the brokerage said in a note.
If Paytm updates September shareholding before early October, there is a possibility that it could qualify for November MSCI Standard Index. The potential influx would be $145 million, as per Nuvama which said that Paytm remained its high conviction inclusion pick.
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