Paytm rallies 4%, hits 18-month high after nearly 23 mn shares change hands
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Shares of One97 Communications-owned Paytm hit a 18-month high at Rs 939, as they rallied 4 per cent on the BSE in Friday’s intra-day trade after nearly 23 million equity shares of the fintech company changed hands via block deals. Paytm is India's leading mobile payments and financial services distribution company. The stock hit its highest level since February 2022.
At 09:15 AM; around 22.75 million equity shares representing 3.6 per cent of total equity of Paytm changed hands through block deals on the BSE, the exchange data shows. The names of the buyers and sellers were not ascertained immediately.
According to reports, Paytm’s promoter Antfin was likely to sell a 3.6 per cent stake, or 23 million shares, in the company via block deals on August 25. Antfin is Netherlands-based arm of Chinese fintech giant Ant Financial. Post today’s sale, Antfin Holdings stake in Paytm will come down at around 9.9 per cent.
The floor price for the deal was likely to be Rs 880.10 per share, which was a 2.7 per cent discount from the closing price of Rs 904.45 recorded on Thursday.
Earlier, on August 14, Antfin had sold 10.3 per cent stake to Resilient Asset Management. On closing of this transaction, Sharma’s shareholding in Paytm (direct and indirect) increased to 19.42 per cent, whereas Antfin’s shareholding reduced to 13.5 per cent.
On August 7, the company informed the stock exchanges that Vijay Shekhar Sharma, founder and chief executive officer (CEO) of Paytm’s parent One97 Communications, agreed to purchase a 10.3 per cent stake, worth $628 million, in the fintech firm from Antfin (Netherlands) Holding BV. The purchase will be made off the market via Sharma’s 100 per cent-owned Netherlands-based entity Resilient Asset Management BV.
Meanwhile, thus far in the calendar year 2023, the stock has zoomed 77 per cent, as compared to 6.3 per cent rise in the S&P BSE Sensex.
Multiple developments over the past few years have helped build India’s payments landscape, be it innovations in mobile payments infrastructure, continued regulatory support, or government initiatives to push for increased consumer and merchant acceptance.
Given the increasing shift towards a cashless economy and user preference for transacting via smartphones, mobile payments continue to scale rapidly. This is further boosted by the growth of mobile commerce and services. As a result, unique online transacting users, transacting for services such as online banking, mobile top-ups, in-store payments etc. are expected to grow from 250-300 million in FY21 to 700-750 million by FY26, Paytm said in its FY23 annual report.
The management said the company achieved operating profit three quarters ahead of plan in the quarter ended December 2022. This performance was driven by sustained growth in revenues on account of platform expansion and increased monetization; better profitability in the payments business as well as increased contribution of high growth, high margin businesses such as loan distribution, and disciplined cost management and better operating leverage.
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