Paytm shares in tailspin as SoftBank sells $215 million worth stake: Buy, Sell or Hold? Check price targets

Paytm had made its stock market debut on November 18 last year. The stock is trading 70 per cent below its IPO issue price of Rs 2150. The 52-week range of the scrip is Rs 1,955 and Rs 510.05.

The 52-week range of the scrip is Rs 1,955 and Rs 510.05. Photo credit: PTI

Paytm Share Price: Shares of Paytm crashed nearly 10 per cent in early morning deals on Thursday, November 17, as Japan-based Softbank sold over 4 per cent stake in Noida-based digital payments and financial services company via a block deal. The stock opened at Rs 562.75 apiece on NSE, tanking nearly 7 per cent from its previous close of Rs 601.45. The sell off dragged the stock to touch day's low of Rs 541.10, tumbling nearly 10 per cent. At 10:10 AM, the stock quoted Rs 546.70.

Softbank's decision to sell a 4.5 per cent stake in One97 Communications for about USD 200 million (around Rs 1,627 crore) comes close on the heels of the end of IPO lock-in period. Softbank is the second largest shareholder with a 17.5 per cent stake in the company. After today's stake sale, Softbank's stake would be reduced to 13 per cent.

Paytm had made its stock market debut on November 18 last year. The stock is trading 70 per cent below its IPO issue price of Rs 2150. The 52-week range of the scrip is Rs 1,955 and Rs 510.05.

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According to two sources aware of the development, Softbank has offered to sell shares in the price band of Rs 555 to Rs 601.55 apiece that are held through its subsidiary SVF India Holding, according to a PTI report.

According to Zee Business panellist and market expert Rajesh Palviya, the chart structure of Paytm is weak and it can test the levels of Rs 555-535. Palviya said that there is a strong resistance between Rs 630 and Rs 650.

Another Zee Business panellist and market expert Vikat Sethi said that Paytm stock should do good after the block deal and suggested that the level of Rs 555 could be a good buy.

Softbank had invested USD 1.6 billion in Paytm in the last quarter of 2017 and offloaded shares worth USD 220 million at the time of IPO, according to PTI report.

"If we add USD 220 million that Softbank raised from selling the stock at the time of Paytm IPO then about one-third of the investment that it made in One97 Communications has eroded," the source was quoted as saying by PTI. Bank of America is the sole book runner for the deal.

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