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Business News/ Markets / Stock Markets/  Ahead of the RBI restrictions, MF industry’s shareholding in Paytm increased by 41% in January 2024: Fisdom
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Ahead of the RBI restrictions, MF industry’s shareholding in Paytm increased by 41% in January 2024: Fisdom

In a recent note, brokerage house Fisdom Research highlighted that before the recent decline since January 31, the MF industry’s shareholding in Paytm increased by 41 percent in January 2024 from December 2023.

In a recent note, brokerage house Fisdom Research highlighted that before the recent decline since January 31, the MF industry’s shareholding in Paytm increased by 41 percent in January 2024 from December 2023.Premium
In a recent note, brokerage house Fisdom Research highlighted that before the recent decline since January 31, the MF industry’s shareholding in Paytm increased by 41 percent in January 2024 from December 2023.

On January 31st, the Reserve Bank of India (RBI) placed operational restrictions on Paytm Payments Bank Ltd. (PPBL) due to ongoing non-compliance issues and significant supervisory concerns.

After the RBI action, One 97 Communications shares plunge 55 percent (From Jan 31 till date) on NSE and BSE. Moreover, following the announcement, major players like Jefferies and Macquarie also downgraded the stock rating.

In a recent note, brokerage house Fisdom Research highlighted that before the recent decline since January 31, the MF industry’s shareholding in Paytm increased by 41 percent in January 2024 from December 2023.

Read here: Paytm share price hits 5% upper circuit as it moves nodal account to Axis Bank

As per the brokerage, in terms of share count, Nippon Mutual Fund, Mirae Mutual Fund, and Motilal Oswal Mutual Fund rank as the top three, holding the largest number of Paytm shares in their portfolios as of January 2024. Two AMCs, Baroda BNP Paribas, and Navi MF were the new entrants in Paytm in Jan’24 through actively managed funds.

Also, Motilal Oswal MF, UTI MF, Franklin Templeton MF, JM MF, and Nippon India MF increased their exposure in Paytm the most in Janaury 2024.

Meanwhile, HSBC AMC completely exited from the stock in January ’24, from its actively managed funds. Quant Mutual Fund on the other hand reduced the exposure by 72.4 percent during the same period and Aditya Birla Sunlife MF has reduced the exposure by 10 percent, it added.

Source: Fisdom
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Source: Fisdom

Furthermore, SBI Mutual Fund, Edelweiss Mutual Fund, Kotak Mutual Fund, TATA Mutual Fund, ICICI Mutual Fund, Bandhan Mutual Fund, and Grow Mutual Fund were not actively exposed to Paytm, informed the brokerage.

Read here: RBI action on Paytm Payments Bank: Regulatory compliance cannot be ‘optional’, says Rajeev Chandrasekhar

Fisdom also pointed out that the number of schemes in Paytm's portfolio increased from 70 to 77 in January 2024.

The Mutual Fund Industry's currently has a 3,384 crore exposure to Paytm. However, it also mentioned that 19 AMCs did not have any exposure in the stock in January 2024.

Currently trading at 376, the stock is 63 percent away from its 52-week high of 998.30, hit on October 20, 2023. Post the RBI move, the stock hit its record low of 318.35 last week on February 16, 2024. In the last 1 year, the stock has shed over 40 percent. Meanwhile, it has cracked over 48 percent just in February after a 20 percent rise in January.

Source: Fisdom
View Full Image
Source: Fisdom

Following a significant downturn Since January 31, shares of One 97 Communications, the parent company of Paytm, have recently displayed remarkable upward momentum, consistently hitting upper circuit limits in recent trading sessions.

In today's trading session, the stock surged to a 5 percent upper circuit limit at 395.25, marking the fourth consecutive day of a 5 percent rally. Over these four days, the stock has accumulated a total gain of 21.5 percent.

Read here: Bernstein rates Paytm ‘outperform’ with a target price of 600/share

This resurgence in buying interest can be attributed to various factors, including the Reserve Bank of India (RBI) extending the deadline, positive remarks from management, and recent developments such as the Enforcement Directorate (ED) finding no violation under the Foreign Exchange Management Act. Additionally, a strategic deal with Axis Bank and an outperform rating from Bernstein have contributed to the positive sentiment surrounding the stock.

The RBI's decision on Friday, February 16, to grant an additional 15 days until March 15, 2024, for Paytm Payments Bank (PPBL) to halt deposits, credit transactions, or top-ups in any customer accounts, wallets, and FASTags, has been perceived as a move to safeguard the interests of customers, including merchants.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decision.

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Published: 21 Feb 2024, 03:12 PM IST
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