Paytm falls 3% after Antfin sells more stake; Societe Generale, Morgan Stanley invest

Shares of One 97 Communications Ltd, which is the parent company of Paytm, dropped nearly 3 percent in trade on August 28, after Ant Group sold more stakes in Vijay Shekhar Sharma’s fintech company. At 12:30pm, the Paytm stock was trading down 2.8 percent at Rs 875.05 on the NSE.

Details of equity changing hands

Antfin (Netherlands) Holding BV, an investment entity affiliated with Chinese billionaire Jack Ma’s Ant Group, sold 3.59 percent stake from its remaining holding in Paytm, for Rs 2,039 crore. Antfin sold 2.27 crore equity shares of Paytm in open market transactions at an average price of Rs 895.20 per share.

On the other hand, Societe Generale and Morgan Stanley acquired a combined 1.57 percent stake in the company. Societe Generale purchased 59.87 lakh shares of Paytm, while Morgan Stanley Asia Singapore Pte bought 39.96 lakh shares. Both acquisitions were made at the same average price of Rs 895.20 per share.

Also Read: Paytm shares gain over 1% after huge block deal

Antfin (Netherlands) Holding BV held a substantial 23.79 percent stake in Paytm as of June 2023. Earlier this month, as per reports, an overseas entity owned by Sharma acquired 10.3 percent stake in Paytm from Antfin through an off-market transfer. On closing of this transaction, Sharma’s shareholding in Paytm increased to 19.42 percent, whereas Antfin’s shareholding reduced to 13.5 percent.

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Brokerage views

In a recent research report, Citi has given a ‘buy’ rating to the Paytm stock and has increased the target price to Rs 1,200 per share from Rs 1,160. “Gains in net payment margins more than offset lower lending distribution take-rates and higher fixed cost increase,” it said.

Also Read: Vijay Shekhar Sharma goes all in, is now the largest shareholder in Paytm

Brokerage firm Goldman Sachs has stated that Paytm is firmly on track to be the most profitable Indian internet company starting FY25. it suggested a target of Rs 1,200 on the stock.

“Post Paytm’s March quarter results, some investors had expressed concerns about the decline in Paytm’s lending take rate, which saw a further moderation in the June quarter to 3.5 percent (from 3.8 percent in the March quarter). However, we note that Paytm’s consistently above expectation growth rate in disbursals has offset any impact of decline in take rates on revenues, and the company has guided for stable take rates from here on,” Goldman Sachs said.

JPMorgan has suggested a target of Rs 950 on the stock. “We think Paytm can be the first Indian B2C internet stock to trade on profit rather than revenue multiples,” it said. Meanwhile, BofA Securities suggested a target of Rs 1,020 on the stock.

Stock performance

The Paytm stock has given a return of 49.72 percent over the last six months. The benchmark Nifty50 index has given a return of 11.38 percent over the same duration.

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