Shares of One97 Communications, the parent of online payment firm Paytm, continues to remain the country's top wealth destroyer for its investors. The stock has dropped nearly 80 per cent from its issue price of Rs 2,150 to hit new all-time low of Rs 452. The selling pressure in the stock intensified after the mandatory lock-in period for its pre-IPO investors ended last week.
Early investor in Paytm, Masayoshi Son -led SoftBank, last week offloaded 4.5 per cent stake in the company worth $20 million and sold shares in the price range of Rs 555-601.
High valuations and lofty revenue models of the new age tech companies like Nykaa, Paytm and Zomato are some of the reasons behind the sharp selloff in shares of these companies, analysts said.
Paytm's consolidated loss has widened to Rs 594 crore in the July-September period of the current financial year. Its revenue from operations increased 76 per cent to Rs 1,914 crore.
The sale is the latest in a string of divestments that SoftBank has made in the past few months, after its flagship Vision Fund unit booked nearly $50 billion in losses in just six months, news agency Reuters reported.
Meanwhile, Reliance Jio's entry in the payments space is also making investors vary of Paytm. International brokerage firm Macquarie earlier this week said with Jio’s access to huge amounts of data, gathered from a non-financial relationship, Jio Financial Services will be able to differentiate from other fintechs. It will be able to process and analyse the data in real-time, and offer financial services similar to larger corporations such as Alibaba, Amazon, Apple, Facebook and Google.
Paytm shares look weak on weekly timeframe and might continue its downward journey to Rs 292, investors can avoid buying this stock as they might suffer further losses, says Manoj Kumar Dalmia, Founder and Director of Proficient Equities .
Ravi Singal, CEO of GCL Securities warns investors to wait before making fresh investment in the company.
"It will take time to reach the bottom. We believe it can test Rs 350 levels after some consolidation. It is possible to accumulate near these levels for the long term," he says.
Ravi Singh, Vice President and Head of Research of Share India says that Paytm share price may continue its selling spree amid continuous dumping of shareholdings by large funds.
"This selling pressure by pre-IPO investors may not stop soon and may further drag the stock to touch the levels of Rs 450 in coming trading sessions," Singh says.
Paytm shares were trading 3.5 per cent lower at Rs 460, underperforming the Sensex which was up 0.2 per cent.
