On August 25, 2023, Paytm’s parent company, One 97 Communications, announced that Ant Group had sold another 3.6% stake in the company. This was the second time in a month that Ant Group had sold a stake in Paytm. The sales have reduced Ant Group’s stake in Paytm to 13.5%.
Paytm’s share price has been declining since its IPO
SoftBank, one of the major investors in Paytm, has been selling its stake in the company through open market transactions. In July 2023, SoftBank sold an additional 2% stake in Paytm, bringing down its shareholding below 10%. This may have created a negative sentiment among the investors and affected the demand and supply of Paytm shares.
Paytm reported a wider net loss of Rs 473 crore in the second quarter of 2023, compared to Rs 437 crore in the same period a year ago. Although the revenue from operations rose 64% year-on-year to Rs 1,090 crore, the company failed to narrow its losses and achieve profitability. This may have raised concerns over the sustainability and growth potential of Paytm’s business model.
The sale of additional stake by Ant Group has led to a decline of 10% in Paytm’s share price. The stock is now trading at around Rs 875, which is significantly lower than its IPO price of Rs 2,150.
It is unclear when Paytm’s share price will recover. The company is facing a number of challenges, and it will need to address these challenges in order to regain investor confidence.
Paytm faces stiff competition from other players in the digital payments and financial services space, such as PhonePe, Google Pay, Amazon Pay, MobiKwik, BharatPe, and others. These rivals may have an edge over Paytm in terms of customer acquisition, retention, innovation, and diversification. For instance, PhonePe recently surpassed Paytm in terms of UPI transactions volume and value in July 2023.
In the meantime, investors who are interested in buying Paytm stock should carefully consider the risks involved.