Fintech giant One97 Communications, owner of the Paytm brand, saw its stock drop by 10% on Thursday after news broke that early investor SoftBank had sold a 4.5 percent stake in the company in a block deal. The news broke in New Delhi.
 |
| Source |
But market watchers anticipate a resurgence of interest in the stock.
"Since its IPO (initial public offering) last year, Paytm has been consistently underwhelming investors. SoftBank sold a 4.5 percent stake at a price range of 555 to 601, which was lower than the stock's closing price the day before. This counter has been hit hard by SoftBank's decision to sell its investment, but we anticipate some purchasing tomorrow once the identities of the buyers are revealed "equity99.com's Head of Research Rahul Sharma said.
Even before they were officially listed, most cutting-edge technology companies saw their share prices plummet. Many industry experts believe that the high valuations and lack of transparency in these companies' revenue models are to blame for the discontent among investors.
It's no secret that Paytm has taken a significant hit here.
Pre-IPO investors are required to keep their shares for at least six months to a year beyond the listing date, in accordance with regulations set forth by the Securities and Exchange Board of India (SEBI). As far as supply goes, there is a substantial influx from pre-IPO placements for these scrips launched in November-December 2021.
"Even while markets have improved, not many publicly traded new-tech businesses have returned money to their backers. We expect Paytm and other e-commerce stocks like Nykaa and Policybazaar to stay under pressure due to a supply glut for the next several weeks "Research Analyst and Senior VP- Research at Mehta Equities Prashanth Tapse made this statement.
On Thursday, after a block trade of 29.5 million shares of Paytm's equity changed hands for 4.5% of the company's total equity, the stock dropped by more than 9% in the first hour of trading. In the first hour of trading, Paytm's stock dropped as much as 10%. Paytm's share price was $545 as of 10 AM, a 9.4 percent decrease from the previous trading day's closing price of $601.
At 10 a.m., the combined trading volume on the NSE and BSE for Paytm shares was just over 47 million. It's important to remember that stock broker platforms don't count block trades when calculating trading volumes. While the seller information for a block deal comprising 29.5 million shares worth 1,660 crore has not yet been made public, the deal has been closed Earlier reports indicated that Masayoshi's SoftBank would sell a nearly 4.5 percent interest in Paytm for $215 million. SoftBank owned 17.45 percent of Paytm as of the end of September.
Comments
Post a Comment