Troubled fintech major, Paytm has finally came out of back to back lower circuits, giving investors a chance at getting out of it while they can.
At the time of publishing of this article, Paytm’s parent One 97 Communications Ltd was trading at Rs 330 per share, a far cry from its IPO price of Rs 2000.
Paytm recently has been embroiled in a lot of negative news.
- First, Paytm had to discontinue loans under Rs 50,000 which were a good chunk of its retail loan portfolio.
- Then came the bummer. Unhappy with the laxing KYC norms at paytm payments bank, RBI imposed a ban on its activities from Feb 29. Remember, Paytm payments bank was already debarred by RBI to add new customers since 2022.
- Now, Paytm has confirmed that Paytm and its various subsidiaries have been getting notices from agencies like ED, for flouting FEMA norms.
Managing Director and Head of Financial Services Research at Macquarie Capital, Suresh Ganapathy isn’t pleased with the way Paytm has handled the KYC issue.
He has given a target of Rs 275 for Paytm, effectively half of the value only coming from the 8000+ crore cash that it holds.
Retail investors, who bought big in Paytm’s IPO and then in Q3 2023, have been on the burning end of this Paytm Saga. Whereas big investors like Warren Buffet’s Berkshire Hathway have already taken a loss from their investment and sold all of his Paytm holdings.
Buffet moved out of Paytm in Nov 2023 and sold it at a price of Rs 877, which now seems a very wise move by the ace investor.
Photo credit: Fortune India
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15/02/2024
