Paytm plunge following news that HDFC Mutual fund significantly reduced its holding of Paytm

The Shares of Paytm , fell sharply by over 6 per cent on Monday10th January 21, to hit its  low of Rs 1,151 before closing at Rs 1,157.9. The shares of the came under pressure following news that HDFC Mutual fund, one of the four mutual funds that were anchor investors in its IPO, significantly cut its holding of Paytm across two schemes in the month ended December 2021.

Paytm fell 6 per cent Monday and has lost 13 per cent since December 31, 2021. While MFs held very small fraction of 0.81 % in the company as of November 17, 2021, the reduction in holding by HDFC Mutual fund dampened sentiment.

Macquarie reduced its price target by 25 per cent to Rs 900 from around Rs 1,200, retaining its ‘underperform’ rating.

Shining Performance :

Paytm records over 4-fold jump in loan disbursals in Oct-Dec 2021.

Digital payments firm Paytm on Monday announced over four-fold jump in loan disbursals from its platform both in terms of numbers and value in the quarter ended December 31, 2021. Paytm disbursed 44 lakh loans worth Rs 2,180 crore during the quarter as compared to 8.81 lakh loans worth Rs 470 crore disbursed from its platform in the year-ago period.

The gross merchandise value (GMV) of the company more than doubled to Rs 2.5 lakh crore during October-December 2021 compared to Rs 1.12 lakh crore it registered in the corresponding quarter a year ago.

Executive resignations :
Earlier last month, 3 senior executives quit Paytm in quick succession.Abhishek Arun, chief operating officer (COO) of Paytm Payments Bank; Renu Satti, COO, offline payments; and Abhishek Gupta, senior vice-president and COO had resigned from Vijay Shekhar Sharma-led Paytm in December 21 . However this is not something new for this company. the company has seen several senior employees resign from the organisation in the last two years. Earlier this year, five senior Paytm executives had quit ahead of its IPO

Upgraded to Large Cap :

In another interesting development, last week, Zomato, Nykaa, Paytm, Policy Bazaar: These newly-listed internet companies make it to AMFI’s largecap list.

Internet companies such as Zomato, Nykaa owner FSN E-Commerce Venture, Paytm owner One97 Communication, Policybazaar owner PB Fintech and nine other stocks have been promoted to large-cap from mid-cap category, according to Edelweiss’ report.

Editorial Comments: Yes, the scrip has some downside risk, but with its strong position in Fintech market, the scrip at currently very low price of Rs. 1133 may be accumulated with long term Investment angle. Considering Macquarie target , you may accumulate the scrip in small lots, to avoid sudden huge loss.