Over the last 18 months Paytm has silently built out its loan distribution business. Yet the stock tanked 10 percent on the expiry of the lock-in period for pre-IPO investors earlier this week. What will it take to prop up the stock which is down 75 percent from its year-ago listing price?
Shortly after Paytm announced its Q2FY23 results on November 8, the stock dipped slightly to around Rs 640. Results, however, were upbeat: Its revenue from operations grew 76 percent year-on-year to Rs 1,914 crore, implying an annual run rate of roughly Rs 8,000 crore or around $1 billion. Adjusted EBITDA (before ESOP costs) narrowed to Rs (166) crore, from Rs (425) crore in Q2FY22.
Despite the strong showing, the stock price is far short of its initial public offering (IPO) price of Rs 2,160 last November. A week after the results, the stock tanked further to around Rs 540 as Paytm’s lock-in period for pre-IPO investors expired on November 15. Softbank, one of its biggest backers with a 17.45 percent stake worth around $900 million, has started the process to sell 29 million shares or 4.5 percent of its holding worth $200 million. It’s currently trading at around Rs.549 on the Bombay Stock Exchange.