Paytm shares: FPIs, domestic investors, mutual funds raise stakes in fintech major despite stock price erosion

Paytm share price has plunged more than 40% in the last three months but retail investors and foreign portfolio investors (FPIs) have been increasing their stake in the fintech giant.

The latest shareholding pattern of One 97 Communications, the parent company of Paytm, shows that the holding of domestic investors has increased in the fourth quarter of FY24 driven by mutual funds along with new FPIs buying the stock.

Mutual Funds have increased their stake in Paytm by 1.17% from 4.99% in the quarter ended December 2023 to 6.15% in the March 2024 quarter, led by investment from Mirae Mutual Fund and Nippon India Mutual Fund. As a result domestic institutional investors (DII) witnessed an increase in stake to 6.86% from 6.06%.

Retail investors' shareholding also went up from 12.85% to 14.53% sequentially while Non-Resident Indians (NRIs) also saw an increase from 0.67% to 0.85%.

Also Read: Paytm's Vijay Shekhar Sharma uses ChatGPT to check negative health claims about cooking oil, here's what he found

Meanwhile, FPI shareholding in Paytm rose by 2.49% to 20.19% in Q4FY24 as new investors including Tiger Pacific Capital, Societe Generale and Norway’s Government Pension Fund Global made an entry into the stock.

In the FPI category, Tiger Pacific Master Fund bought 65,79,135 Paytm shares, aggregating to 1.04% stake in the last quarter and Goldman Sachs (Singapore) Pte purchased 84,01,067 Paytm shares, or 1.32% stake.

Societe Generale bought 89,01,090 shares or 1.40 stake, Morgan Stanley Asia (Singapore) Pte bought 1,00,95,350 shares or 1.59%, and Norway’s Government Pension Fund Global purchased 85,03,220 shares or 1.34% holding in Paytm.

On the contrary, BNP Paribas Arbitrage and Canada Pension Plan Investment Board exited Paytm in the last quarter.

The Foreign Direct Investment (FDI) shareholding in Paytm dropped to 60% as compared to 66% in the December quarter. The shareholding by SVF India Holdings (Cayman) Limited (SoftBank) decreased from 6.46% to 1.40% in Q4FY24.

Meanwhile, One 97 Communications has also witnessed a decline in its unified payments interface (UPI) market share, dropping to 9% in March, according to data available on NPCI. This marks its lowest level in the past four years.

Read here: Paytm's share in UPI market declines to 9% in March, lowest in last 4 years: NPCI data

The fall in Paytm UPI market share is attributed to regulatory restrictions imposed on its affiliate, Paytm Payments Bank Limited (PPBL), by the RBI.

In other news, Paytm Payments Bank's managing director (MD) and chief executive officer (CEO) Surinder Chawla resigned from the company. Chawla will be relieved from his duties on June 16, 2024.

In his resignation letter, the outgoing Paytm Payments Bank’s CEO Surinder Chawla said that he has tendered his resignation on account of personal reasons.

Read here: Paytm Payments Bank's CEO Surinder Chawla resigns

After the news, Paytm share price fell over 4% on Wednesday. Paytm shares declined as much as 4.03% to hit an intraday low of ₹388.00 apiece on the BSE on April 10.

Paytm Q4 results are yet to be released. However, the company is expected to see a decline in operating profitability after the Reserve Bank of India’s (RBI) ban on Paytm Payments Bank.

Brokerage firm Motilal Oswal estimates the value of disbursed loans to plunge 67% QoQ, as the company has suspended postpaid loans due to RBI concerns and put merchant loans on hold pending data on QR transition. Revenue from operations is also projected to decrease by 21% YoY, while contribution profit is estimated to fall by 15% YoY.

The broking house has a ‘Neutral’ rating on the stock and Paytm share price target of ₹475 apiece.

At 10:00 am, Paytm share price was trading 1.63% lower at ₹397.70 apiece on the BSE. 

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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 making any investment decisions.