- Date : 12/06/2023
- Read: 3 mins
Though Paytm’s IPO received a lukewarm response on the exchange when listed, the shares have come a long way. Over May 2023, the shares grew consistently posting a 12% increase. Know what gave the positive momentum to the share price.
- Paytm’s parent company, One97 Communications, witnessed a 12% growth in share price in a month.
- This growth has added to the overall growth in the share prices which have jumped 53% from 2023 till June.
- The strong financial results, good business performance, and RBI approvals are helping the rally in share prices.
- Many brokers are maintaining a ‘Buy’ rating on the stock which can be a good addition to your portfolio.
Paytm is one of India’s leading companies engaged in payment gateways, shopping, online gaming, investments, etc. It launched its IPO in November 2021 which received a lukewarm response on the exchange. However, of late, Paytm’s (One97 Communication) shares are in a rally. In the past month, the shares have registered a 12% jump while in 2023, the shares have grown by 53%.
Why the rally?
Several factors have contributed to the rally in Paytm’s shares. Have a look –
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Favourable Financial Results
In the fourth quarter of the financial year 2022-23, Paytm reported a net loss of ₹168 crores which is considerably lower than the loss of ₹763 crores which was reported a year earlier. Despite making losses, Paytm reported a 51% annual jump in its revenue which grew to ₹2334 crores.
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Good Business Performance
The operating margins of Paytm witnessed good growth as the gross merchandise volume grew 40% Year-on-Year (YoY) while the monthly transacting users jumped 27%. The value and number of loans that Paytm has disbursed in a year also grew adding to the revenue’s growth. The number of loans grew 82% YoY while their value jumped 253% YoY amounting to ₹12,554 crores.
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RBI’s Approval
Recently, the Reserve Bank of India (RBI) approved Paytm’s First Loss Default
- Guarantee (FLDG) program which allows collaboration between fintechs and financial institutions (banks and Non-Banking Financial Companies) for loan distribution.
Paytm was waiting for approval for a long time and the RBI’s nod has increased its market perception.
Also Read – Here’s the expert's take on the rally in Paytm shares
What do experts recommend on Paytm share?
Given the consistent rally, many expert stockbrokers have given a ‘Buy’ rating on Paytm’s shares. The target price ranges from ₹750 to ₹1250 across brokers.
So, if you are an existing investor, you can hold onto your investment for future growth prospects. Alternatively, you can add the share to your portfolio, if you don’t own any, and capitalise on the growth potential.
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The bottom line
Assess your risk appetite and investment advice before investing in the company’s shares. They can make a good addition to your portfolio but do analyse the technical and fundamental aspects of the stock before investing.
Also Read – Know more about the UPI feature of single block multiple debits
Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.
