Shares of One 97 Communications (Paytm) has been far away from the dream run its investors hoped. The stock has crashed over 72 percent from its all-time high of ₹1,961, hit on November 18, 2021, and is down 75 percent from its issue price of ₹2,150.
The stock has consistently been trading around its 52-week low which led stock exchange BSE to ask for clarification, further adding to the woes of the fintech stock.
"Exchange has sought clarification from One 97 Communications on March 22, 2022, with reference to significant movement in price, in order to ensure that investors have the latest relevant information about the company and to inform the market so that the interest of the investors is safeguarded," BSE said in its filing. However, it did not specify the 'significant movement' mentioned.
Clarifying the BSE query, the company said, that it has been complying with all the required regulations of Sebi and have, from time to time, made all necessary disclosures to the Stock Exchanges within the stipulated timeline.
It added that further, as on date, there is no information/ announcement, which in our opinion may have a bearing on the price/ volume behavior in the scrip of the Company and which is yet not disclosed to the Stock Exchanges.
Paytm also pointed out in the issued clarification that its business fundamentals remain robust as demonstrated in our last earnings release dated February 04, 2022.
Post the clarification, the stock rose around 3.3 percent in intra-day deals but later fell around 5 percent to hit another 52-week low of ₹536 on the BSE.
The fintech startup had launched its ₹18,300-crore IPO in November 2021, which was the largest ever IPO but the stock has not performed well since its listing.
Last week, the stock crashed over 26 percent just in 3 sessions to hit a new low after the Reserve Bank of India (RBI) ordered a temporary ban on Paytm Payments Bank from onboarding new customers.
The RBI on Saturday directed Paytm Payments Bank to stop taking on new customers with immediate effect, citing “material supervisory concerns observed in the bank." The parent firm One97 Communications, however, assured that the RBI's ban will not impact any existing customers of payment banks which means existing customers can continue to do their transactions on the Paytm platform.
Global brokerage house Macquarie once again cut its target price for the company from ₹700 to ₹450, citing lower values for fintech companies throughout the world. Macquarie initiated coverage of the stock with an underperform rating and a price target of ₹1,200 ahead of the IPO. The initial public offering (IPO) was priced at ₹2,150.
Meanwhile, 71.47 percent of analysts tracked by MintGenie believe that the stock is 'extremely risky'.
When it went public for the first time, the firm was valued at ₹1.39 lakh crore (IPO). Now, its market cap is below ₹35,000 crore.
In Q3 FY22, the company's net loss widened to ₹779.80 crore as against ₹461.20 crore in the year-ago quarter. However, its total operating revenue saw a massive jump of 89 percent YoY to ₹1,456 crore in Q3 FY22 from ₹772 crore in the year-ago quarter.
As per Macquarie, profitability is a distant reality for the firm.