Why Paytm shares falling, It can drop to 900 Rs?

Why Paytm shares falling: Shares of Paytm (One97 Communications) are currently trading at a level of Rs 1169.20, down more than 5 percent on the Bombay Stock Exchange. The new target price (Rs 900) given by Macquarie for Paytm stock is 58 per cent below its issue price of Rs 2,150. At the same time, the new target price is more than 20 percent below the current stock price.

What Macquarie said on Paytm Stocks

Foreign brokerage house Macquarie has also slashed Paytm's revenue growth rate forecast for the financial year 2021-26 from 26 per cent to 23 per cent. Also, lower revenue and higher employees, software-cloud expenses have also pushed the company's per share loss estimate up by 16-27%.

Paytm's payments business still accounts for 70 per cent of the overall gross revenue. In such a situation, any regulation related to capping charges can have a direct impact on its revenue. The brokerage house has said that Paytm's entry into insurance was recently rejected by IRDAI. Moreover, the resignation of senior executives has also been seen as a risk. Paytm's shares have fallen more than 40 per cent since November 18.

Macquarie

Why Paytm Shares falling?

Paytm's IPO was the biggest issue in the country till date. Through this, the company had raised Rs 18,300 crore from the primary market. The issue had received less than 2 times the bids. Its valuation was very high, due to which investors did not give it much value. It had received only 24 per cent bids in the HNI investors category.

Like the disappointment of Paytm's investors, such disappointment did not happen to investors of any IPO during the listing in the recent past. Since the listing, Paytm has lost Rs 50,000 crore to investors. Before listing in the stock market, the market value of Paytm according to the IPO price was Rs 1.39 lakh crore and today its market cap has come down to Rs 88,139 crore.

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