Paytm advances 5% on report that Sunil Mittal is eying stake in company

Shares of digital financial services firm One97 Communications, which owns Paytm, rallied 5 per cent to Rs 655.30 on the BSE in Monday's intra-day trade amid heavy volumes on report that telecom tycoon Sunil Mittal is eying stake in the company.

In the past two trading days, the stock of the fintech company has surged 8 per cent in an otherwise weak market. At 09:28 am, Paytm was quoting 3 per cent higher at Rs 642, as compared to 0.22 per cent decline in the S&P BSE Sensex. A combined around 3.2 million equity shares had changed hands on the counter on the NSE and BSE in the first 13 minutes of trade.

As per a Bloomberg report, Indian telecommunications tycoon Sunil Mittal is seeking a stake in Paytm by merging his financial services unit into the fintech giant's payments bank.

Mittal, the report said, seeks to fold Airtel Payments Bank into Paytm Payments Bank in a stocks deal and is also seeking to buy Paytm shares from other holders. Talks are in early stages and Airtel and Paytm may not reach a deal, the report added.

Meanwhile, Ant Group Co. is considering selling some of its shares in the operator of Indian financial technology firm Paytm to keep its holding within a required threshold, another Bloomberg report said, quoting people familiar with the matter.

The Chinese fintech giant has been discussing options to reduce its stake in One 97 Communications Ltd. after its share percentage increased passively due to share buybacks, Bloomberg reported.

Earlier, this month, Paytm completed buyback of shares worth Rs 849.83 crore at an average price of Rs 545.93 per share.

According to a regulatory filing, the company bought back 15.57 million shares in the price range of Rs 702.65 to Rs 480.25 apiece.

In the past one month, Paytm has outperformed the market by surging 25 per cent on improved financial performance in the October-December quarter (Q3FY23). In comparison, the S&P BSE Sensex was up marginally by 0.11 per cent during the period. Moreover, in the past three months, it has zoomed nearly 50 per cent, as against 5 per cent decline in the benchmark index.

In Q3FY23, Paytm's Ebitda (earnings before interest, taxes, depreciation, and amortization), an indicator of operational profit, before ESOP cost margin, improved to Rs 31 crore. The company said it achieved operating Ebitda profitability three quarters ahead of guidance, driven by revenue growth across businesses, disciplined cost management, and operating leverage.