Chinese fintech giant Antfin offloaded 3.6 percent stake or 2.27 crore shares of payments aggregator Paytm through a block deal on Friday. Citigroup was the broker of the deal.

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The transaction was done at Rs 895.2 per share, garnering about Rs 2,037 crore, according to data from BSE. This represents a 1.3 percent discount from the closing price of Rs 907 recorded on Thursday.

Societe Generale has acquired a total of 59.87 lakh equity shares or 0.94 percent stake for Rs 536 crore and Morgan Stanley Asia (Singapore) Pte bought 39.96 lakh shares or 0.63 percent stake in Paytm at an average price of Rs 895.2 per share for Rs 358 crore.

At the end of the June 2023 quarter, Antfin held 23.79 percent stake in PayTm. Following today's sale, Antfin holds a 20.20 percent stake in the digital payments firm.

Antfin's selldown comes after China's Alibaba sold its entire stake in Paytm in February. Japan's Softbank Group Corp has also been cutting its stake in Paytm through open market deals, with its holding down to 9.18 percent after its latest deal.

Earlier this month, Paytm informed the exchanges that Vijay Shekhar Sharma, Founder and Chief Executive Officer of One 97 Communications Limited and Antfin have entered into an agreement where Sharma will purchase a 10.3 percent stake in the company.

According to the filing, an overseas entity 100 percent owned by Sharma called Resilient Asset Management BV will acquire the stake in Paytm from Antfin through an off-market transfer. On closing of this transaction, Sharma’s shareholding in Paytm will increase to 19.42 percent, whereas Antfin’s shareholding will reduce to 13.5 percent.

Bernstein expects Paytm to touch Rs 1,100

Paytm shares, listed as One97 Communications, hit an 18-month high on Thursday after brokerage firm Bernstein initiated coverage on the stock.

Bernstein has a target price of Rs 1,100 per share on the counter, which implies a potential rally of more than 21 percent from the current market levels.

The stock has significantly outperformed the market with 71 percent gain so far this year and the stock is up 18 percent in the last one year. Paytm shares more than doubled from its 52-week low of Rs 439.60, hit on November 24, 2022.

Paytm's early signs of an edge in digital lending, achieved by leveraging its dominant digital payments platform, puts it on the right side of the disruption, the brokerage said in its research report. Bernstein is betting on the company’s dominance in the digital payments segment.

The brokerage also pointed out that the rise of UPI in cashless payments, which now account for over 60 percent of total cashless transactions including a lion's share of high value transactions, has led to emergence of new winners.

"We find Paytm developing into a sustainable, profitable model with an edge in small ticket consumer lending, helped by steady improvement in payments margins," it said.

"We expect its loan disbursal volumes to grow sharply and achieve a market share of 4 percent by FY26E (in high-yield (over 13 per cent interest rate) household lending segment). And with stabilising margins in its payments segment, we expect the business to breakeven by FY25E and generate an EPS of Rs 130 by FY30E," the brokerage said.

First Published:Aug 24, 2023 5:51 PM IST