Paytm says its fundamentals are ‘robust’, market cap now below $5 billion

• BSE had sought Paytm’s clarification over the steep fall in the company’s share price.
• The company has emphasised that its business fundamentals remain robust.
• The value of Paytm’s share price has eroded nearly 75% since its IPO in November.

BSE on Tuesday sought clarification from One 97 Communications — the parent company of digital payments giant Paytm — on the steep fall in the company’s share price.

In a response to the query, One 97 Communications emphasised that Paytm’s business fundamentals remain “robust” as demonstrated in the company’s last earning release dated February 4, 2022.

“We would like to reiterate that the company is committed to comply with the listing regulations and any information/announcement, likely to have bearing on the price/volume of the shares of the company would be disclosed, from time to time, to the Stock Exchanges within stipulated timeline,” the company added.

Notably, the value of Paytm’s share price has eroded nearly 75% since its initial public offering (IPO) in November. The company had raised its IPO at ₹2,150, but its shares are currently trading at close to ₹545.

Its market cap has also fallen from $19.9 billion to $4.6 billion on Wednesday, March 23. This is much lower than other listed new age tech firms like Zomato and Nykaa, which were valued significantly lower than Paytm in the private market.

Paytm’s shares were trading at ₹544 at 10:02 a.m. on March 23, after witnessing a marginal increase of less than half a percent.

Last week, global investment bank Macquarie further reduced financial payments firm Paytm’s target price to ₹450, citing “tough times ahead”. The report highlighted that the recent curb on Paytm Payments Bank has reduced the company's chances of getting a small finance banking licence, “thereby impeding its ability to lend”.

Even Indian stock brokers — like Manoj Dalmia of Proficient Equities, Ravi Singh of Share India, Anuj Gupta of IIFL Securities — had expected Paytm to hit ₹500-₹550 mark, which the company did this week.

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