Paytm shares bounce back, up over 6% intraday

The shares of One97 Communications, which operates Paytm recovered on Tuesday morning to trade over 6 per cent higher after suffering nearly 40 per cent loss post listing.

At 11:50 am, Paytm was trading at ₹1445 on the BSE, up ₹84.70 or 6.23 per cent. It had opened at ₹1358 as against the previous close of ₹1360.30. It recorded an intraday high of ₹1457 and a low of ₹1358.

On the NSE, it was trading at ₹1,450.80, up ₹91.20 or 6.71 per cent.

However, experts expect Paytm stock prices to remain subdued for a while amid high valuations and profit-booking in the market.

Dr. Ravi Singh, Head of Research & Vice President, ShareIndia said, "In this current market scenario where the benchmark indices are in a profit booking zone, we expect Paytm share prices to remain subdued and weak for some more time. It may touch the level of 1150 before fresh buying triggers. We advise investors to be cautious and enter only when sentiments turn around."

Ravi Singhal, Vice Chairman at GCL Securities said, "Paytm shares are still looking weak and it may go down up to ₹1,000 to ₹1,100 per share levels. Those who have Paytm shares in their portfolio are advised to take this bounce back as an opportunity to exit and enter at around ₹1,000 to ₹1,100 per share levels for 12-15 months target of ₹2,150 maintaining stop loss at ₹800 per stock levels."

Manoj Dalmia, Founder and Director, Proficient equities Private limited said, "Investors who are stuck should wait as there is small buying being seen once, one may expect consolidation around the price of ₹1200-1350 which can be a buying opportunity considering base formation. Hold for a few quarters and wait for expected results this might trigger some buying action from FII, DII raise the price, recommend to exit at a breakeven price."

Paytm, after crashing 27.25 per cent on listing day had slumped further by 13 per cent on Monday even as the company reported a 131 per cent increase in its gross merchandise value (GMV) in October 2021 on a year-on-year basis.

The company’s market cap was down by ₹50,000 crore in two days of trading.

High valuations and profitability were some of the key factors that impacted investor sentiments.

Santosh Meena, Head of Research, Swastika Investmart Ltd. on Paytm said, " If we talk about the future outlook then it is still erratic because the market is not clear about its core business and timing of profitability."

"The market will watch how Paytm will use its strengths to enter into new businesses or create a moat and if it manages to emerge as a leader in a particular business then we can expect buying interest from lower levels otherwise it may take many years to reach its peak valuations," added Meena.

On its part Paytm tried to assuage investor concerns by releasing some positive numbers. It reported a 418 per cent year-on-year growth in the value of loans disbursed in October.

Meanwhile, the Board of Directors of the company is scheduled to meet on Saturday, November 27, 2021 to consider financial results of the company for the quarter and half year ended on September 30, 2021.