Paytm’s stock fell when it was revealed that HDFC Mutual Fund dramatically cut its holdings in Paytm across two schemes in the month of December 2021.
One 97 Communications, which owns the Paytm brand, saw its stock plummet by more than 6% on Monday, reaching an all-time low of Rs 1,151 before ending at Rs 1,157.9. The shares fell when it was revealed that HDFC Mutual Fund, one of the four anchor investors in its IPO, drastically cut its holding of Paytm across two schemes in the month ended December 2021.
Paytm plunged 6% on Monday, and they have lost 13% since December 31, 2021. While MFs held 0.81 percent of the company as of November 17, 2021, the disclosure of HDFC Mutual Fund’s drop in holdings in the company dampened sentiment. “When the fund management believes the stock will continue to trade low in the near to mid-term, they record losses and leave,” a fund manager explained. A spokeswoman for HDFC MF declined to comment, stating that fund firms do not comment on stock-specific investing decisions. Macquarie reduced its price objective by 25% to Rs 900 from about Rs 1,200, while maintaining its ‘underperform’ rating.
Paytm has responded.
In the third quarter of the fiscal year 2022, the number of loans given on the Paytm platform increased 401 percent year on year to 4.4 million loans. “… In Q3FY22, the value of loans given through our platform during the quarter was Rs 2,180 crore (run-rate of $1.2 billion), a 365 percent growth.” Paytm stated, “We have seen stellar growth in… lending offerings…”