Friday, January 27, 2023

Paytm share price tumbles nearly 10% as SoftBank seeks to cut stake

Shares of One 97 Communications Ltd (Paytm) fell nearly 10% to ₹541 on the BSE in early deals on. Thursday after a unit of Japan’s SoftBank Group Corp offered to cut its stake in the company. According to data compiled by Bloomberg, around 29.5 million shares, equivalent to 4.5% of. The company’s equity capital were traded in a single block on the NSE.

The trade dragged Paytm Share Price to their biggest fall since July 29. Reports on Wednesday suggested that Japan’s SoftBank will sell its one-third stake in Paytm payments app owner One97 Communications Ltd through a $200 million block deal.

SoftBank, which owns 12.9% of Paytm, plans to sell 29 million shares or 4.5% of the fintech company on Thursday, suggested a Mint report on Wednesday. The shares are being offered to institutional investors at ₹555-601.45. The report added that if completed, the sale would fetch SoftBank at least ₹1,628.9 crores or $200 million.

The sale comes after the end of the one-year mandatory lock-in for pre-IPO investors in Paytm. Stocks often fall after the lock-up ends, as investor selling puts downward pressure on stocks.

Paytm Share Price made its stock market debut in November last year and the stock has declined nearly 65% ​​since its listing amid the global tech meltdown that started last year. Other new-age tech stocks including Zomato, Nykaa, and PB Fintech – which went public last year have also had a tough month in the stock market so far and have already fallen below their respective issue prices.

Paytm’s net loss widened to ₹571 crores in the July-September period from ₹473 crores a year ago, however, narrowed from ₹650 crores in the previous quarter to June 2022. Meanwhile, its consolidated revenue from operations grew by nearly 76% to ₹1,914 crores during the reported quarter, driven by a pick-up in lending business, return to payment services to merchants, and growth in cloud revenue, which was higher than the corresponding quarter last fiscal. ₹1,086 crores in the quarter.

Paytm Chief Executive Vijay Shekhar Sharma said in a letter to shareholders earlier this week that the company is on the right track to profitability and free cash flow following its recent quarterly reports, which showed strong operating profit and narrowing EBITDA losses. Has been.

Read More: SBI ATM Rule: Important news for SBI customers, change in ATM cash transaction rules again

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