Indian equity markets have seen many New Fintech IPOs in the current year among which major companies have generated negative returns for the investors who have applied in the initial public offerings. The street has thereafter become cautious with respect to any New Age IPOs that have good brand value but have no cash flow generation in the books.
Among the newly listed companies, the share value of Fintech PAYTM has witnessed a roller coaster ride in its initial life after getting listed on the bourses. From the offer price of 2150 in IPO, the stock price of the company has dipped towards 521 levels in the month of March 2022 which is a massive almost 75% decline in the share value per share. Surprisingly, the volumes in this massive slide of the price were also huge which has feared many investors about the prospects of the company and the stock price.
However, in the recent past, the company has come out with a couple of good operational updates in the last couple of months about the business growth and the future prospects of the company which has fuelled good confidence among the market participants after the massive sell-off in major of the newly listed companies.
As far as the recent price action is considered, the company has done extremely well where from the lows of 520-530 odd levels, the stock price is currently trading above 800 levels generating around 50% in a small timeframe of around four months. This recent outperformance in the stock price was seen after good financial updates from the company and after the news of the company’s founder, Vijay Shekhar Sharma bought 1,70,000 shares in the company for about Rs 11 crore in the month of May 2022. The investors have again started developing interest in the stock for trading and investing purposes seeing the recent price value action on the bourses.
On the other hand, the institutional investors which include foreign portfolio investors and mutual funds rose their stake in One97 Communications (Paytm) in the June quarter. As per the official data, the foreign portfolio investors (FPIs) jumped to 83 from 54 in the March quarter, taking the number of shares held by them to 3,53,72,428 from 2,86,80,948 in the previous March quarter. After these recent changes, the foreign institutional investors own a 5.45 per cent stake in Paytm against 4.42 percent in the March quarter.
The number of mutual funds holding stakes in the company also went to 19 from 3, taking the number of shares held by them to 74,02,309 from 68,19,790 quarter-on-quarter. The company is expected to declare its first quarter results in the current week and the investors will have close monitoring of the numbers and the outlook from the management. We have kept a note that the stock has given good returns from the lower levels of more than 50% but still it is down more than 60% from its issue price. So, a major scope for the upside is also possible and some correction towards the downside also cannot be ruled out after the recent sharp pullback in the stock price.
As far as the technical charts are concerned, the stock price is showing bullish signs on the short-term charts with strong support placed around 730 and 690 levels while 900 and 940 will be the immediate resistance while medium-term charts don’t suggest any signals at the current levels. We currently have no view on the company, the recent developments and the price action was discussed to make investors and traders plan their positions accordingly and understand the upcoming results and any other updates from the company.