Paytm share price: Stock gains ahead of buyback meeting; should you buy?

Paytm share price: According to a communique by the company, its board of directors is scheduled to meet today to consider the share buyback proposal.

Paytm app is seen on a smartphone in this illustration taken, July 13, 2021. Pic: Reuters

Paytm share price: Shares of Fintech company Paytm gained on Tuesday, December 13, as the Street keenly awaits the details of the buyback proposal. The stock opened at Rs 535 apiece on NSE, jumping more than 1 per cent from the previous close of Rs 528.78. The buying pulled the stock to hit the day's of Rs 542.65, jumping around 3 per cent.

According to a communique by the company, its board of directors is scheduled to meet today to consider the share buyback proposal. The buyback plan is expected to ease the looming concerns in Paytm going forward and benefit the shareholders. This would be the first such corporate action by Paytm since listing in November 2021.

"..Board of Directors of the Company is scheduled to be held on Tuesday, December 13, 2022 to consider a proposal for buyback of the fully paid-up equity shares of the Company...," the company said in an exchange filing.

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The stock also picked up after the company recorded healthy growth in payments and loan distributions. The digital financial services firm on Monday said that its loan disbursals reached an annualised run rate of around Rs 39,000 crore in November this year. It reported loan disbursals at an annualised run rate of around Rs 37,000 crore in October.

Meanwhile, global brokerage firm Morgan Stanley has tagged an ‘equal-weight’ rating on Paytm with a price target of Rs 695.

“The merchant payment volumes (GMV) growth remains healthy, though it moderated on a YoY basis versus last month. Average monthly transacting users (MTU) was steady and growth sustained at 32 per cent YoY versus last month," it said.

"Loans disbursed of Rs 32 billion grew by 6 per cent MoM, helped by improving ticket size, where as the devices deployed rose to 5.5 million against 5.1 million in October 2022,” the brokerage firm added.

Anil Singhvi’s take on Paytm

Earlier, Zee Business Managing Editor Anil Singhvi recommended investors hold as the stock has bottomed out. He said that Rs 440-450 is strong support unless the buyback news is not big. He added that the share could see an upside of Rs 550- 565 in the coming days.

Paytm Share Price History

YTD, Paytm share price has tanked 60 per cent. At current levels, the company has a market cap of Rs 34.27 thousand crore, according to NSE website.

Paytm made a tepid stock market debut on November 18, 2021. The Rs 18,300 crore-IPO (initial Public Offer) was launched in November with a price band of Rs 2,080-2,150 apiece. The stock got listed at Rs 1,950 apiece levels on the exchanges – 9 per cent lower than the issue price.

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