24 Mar , 2022 By : monika singh
Shares of One 97 Communications, which have lost three fourths of their value since listing, nosedived to an all-time low on Wednesday. In a clarification to the exchange, Paytm’s parent firm affirmed that the business fundamentals were robust and the company had been complying with all regulations laid down by the Securities and Exchange Board of India (Sebi).
With a market cap of Rs 1.01 trillion post listing, Paytm ranked at 51st among listed entities on November 18, which now dropped to 134, according to Capitaline data. Additionally, of the total 86 trading sessions since listing, 58 saw the Paytm stock ending in the red. Wednesday was not an aberration either, the stock closed 3.6% lower at Rs 524.40 on the BSE. “Further, as on date, there is no information/ announcement, which in our opinion may have a bearing on the price/ volume behaviour in the scrip of the Company and which is yet not disclosed to the Stock Exchanges,” One97 Communications said in an exchange filing.
Last week, Macquarie, the brokerage which was early to predict Paytm’s troubles, had slashed its price target to Rs 450 from Rs 700, citing lower valuations for fintech companies globally. Earlier, the Reserve Bank of India (RBI) had barred Paytm Payments Bank from onboarding new customers and asked to conduct a comprehensive third-party IT audit. JPMorgan, which has an overweight rating on the stock, believes the net impact of RBI ban from a business perspective is limited but this will be a sentiment negative on the stock as regulatory concerns can be long drawn out and are de-rating events. “We keep our revenue estimate unchanged but cut our Mar-23 price target to Rs 1,200 factoring in a higher COE and a lower target multiple for the business,” the foreign brokerage said in March 14 note.
What is more worrying to the investors is the fact that the Paytm scrip is now placed under stage I of Additional Surveillance Mechanism (ASM), a framework introduced by exchanges to protect retail investors from the extreme volatility in stock price. As of Wednesday, 75 such stocks have been placed under Short Term ASM Securities on the BSE. According to the exchange, the applicable margin rate for the shortlisted stocks will be 40% or the existing margin whichever is higher, subject to maximum rate of margin capped at 100%. Further, it may also be noted that the shortlisting of securities under ASM is purely on account of market surveillance and it should not be construed as an adverse action against the concerned company.
0 Comment