Paytm Share Plunges By Over 4% Amid Block Deal Reports

The price of Paytm's stock dropped by more than 4 per cent due to rumours of a block transaction. On the BSE, Paytm shares dropped as much as 4.63 per cent to Rs 880.00 a share.

The parent company of the well-known fintech business Paytm, One 97 Communications, reportedly saw a significant block transaction in its shares.

According to sources, the trade involved the exchange of almost 1.6 crore Paytm shares, or 2.56 per cent of the stock. At an average price of Rs 884 per share, the deal value was Rs 1,441 crore when it was completed.

Paytm's share stood at Rs 895, a drop of Rs 28.40, by 3.08 per cent at the day's close.

With a roughly 70 per cent year-to-date (YTD) increase in the stock, Paytm shares have witnessed a respectable climb this year. Furthermore, the price of Paytm's shares doubled during the previous year.

The company's better operating performance has led to a surge in Paytm shares, and analysts predict the fintech behemoth will soon earn a profit.

According to international brokerage firm Jefferies, Paytm is expected to become profitable within the next four quarters and rank among the few significant profitable fintechs in the world with double-digit EBITDA margins, steady profitability, and robust growth.

The Reserve Bank of India (RBI) raised the risk weight on bank and non-bank financial company (NBFC) consumer loans by 25 per cent on November 16. As a result, the cost of funding for these loans will increase.

BofA Securities predicts that the recent RBI regulations will also have an effect on Paytm, potentially leading to a decrease in loan growth or some challenges in maintaining take-rates.