Paytm falls for 10th day in a row to hit new all-time low, longest losing streak since listing; what's behind the crash?

The sell-off in Paytm shares, which commenced in early February, appears to be continuing, as the stock hit a new all-time low of ₹317.15 apiece in today's session as it was locked in the 5% lower circuit limit. The stock's previous all-time low of ₹318 was recorded in mid-February. 

Today's downturn in One 97 Communications marks the 10th consecutive session of losses for the stock, which was the longest losing streak since listing in November 2021. During this period, the stock has fallen from ₹391.35 apiece to today's closing price of ₹317, translating into a drop of nearly 19%. 

Also Read: Paytm: Two more top executives depart amid restructuring efforts

This downturn was attributed to the company's announcement over the weekend regarding the resignation of its President and Chief Operating Officer, Bhavesh Gupta. According to the company, Gupta's resignation, occurring just a year after his appointment, is attributed to personal reasons. 

This marks the second high-profile resignation within a month, following the departure of Surinder Chawla, Chief Executive Officer and Managing Director of Paytm Payments Bank, on April 9th.

UPI transaction volume down 

Adding to the challenges is the decline in the company's Unified Payments Interface (UPI) transactions for the third consecutive month in April.

In April, the company processed 1,117.13 million transactions, marking a 9% month-on-month decrease from the 1,230.04 million transactions handled in March. 

Consequently, the company's market share in the UPI ecosystem has contracted, Business Standard reported on Tuesday, citing data from the National Payments Corporation of India (NPCI).

Also Read: India recorded about 131 billion UPI transactions in FY24, says FM

In April, the company held an 8.4% market share in the UPI applications’ ecosystem, down from 10.8% and 9.13% in February and March, respectively. Despite this decline, the company remains the third largest player in the ecosystem, as other players are considerably smaller in comparison to the fintech major, the report said. 

The decline in UPI transaction volume began after the RBI imposed restrictions on Paytm Payments Bank.

Also Read: Paytm completes merchant migration to new UPI ids

Down 85% from IPO price 

With the stock's current closing price of ₹317.15 per share, it is trading at an 85.25% discount compared to its issue price of ₹2,150 per share. This presents challenges for investors who participated in the initial public offering and have held onto their positions. The company's current market capitalisation is ₹20,164 crore.

Meanwhile, SoftBank entity SVF India Holdings significantly reduced its stake in the company from 6.46% in Q3 FY24 to 1.40% in the March quarter (Q4 FY24). 

As of the end of Q4FY24, foreign institutional investors (FIIs) held a 60.4% stake in Paytm, while domestic institutional investors (DIIs) held a 6.1% stake. Retail investors increased their stake in Q4 FY24 to 32.8% from 30.2% in Q3 FY24.

According to Trendlyne shareholding data, Paytm's founder and CEO, Vijay Shekhar Sharma, holds a 19% stake in the company, which includes a 9.88% stake held through Antfin (Netherlands) Holding B.V.

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