Paytm parent One97 Communications' shares plunged more than eight percent to a record low on Monday, sliding below the Rs 900 mark for the first time since their listing in November 2021. The Paytm stock breached the Rs 900 mark about two weeks after Macquarie cut its target price for the digital payments company by 25 percent.

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Paytm shares declined by as much as Rs 78.4 to Rs 881.5 on BSE during Monday's session. At this level, the One97 stock changed hands at a discount of 59 percent to its issue price of Rs 2,150.

The stock finished the day at Rs 917.4 apiece, down 4.4 percent from its previous close.

In a report released on January 10, Macquarie had retained its 'underperform' rating for Paytm and raised its loss projections for the company by 16-27 percent for FY22-25 citing lower revenue, and higher costs both on employee and software fronts. Macquarie brought down its target to Rs 900 from Rs 1,200.

The latest bout of weakness in Paytm shares comes amid a broad-based sell-off in the market. Paytm joins a slew of recently-listed new-age business stocks whose stocks are being dumped by investors, who have lost their appetite for highly valued technology companies.

What to do with Paytm shares now?

Paytm is in its worst performance as the overall market is in a correction mode, said Ravi Singh, Vice President and Head of Research at Share India Securities.

"Investor sentiment was already weak in Paytm... However, technically, the stock may consolidate and a fresh buy entry may be taken if it sustains the current levels for few weeks," he said.

Ravi Singhal, Vice Chairman at GCL Securities, is of the view that those holding Paytm shares should use any bounce to exit and wait for ideal levels to reenter.

"Fresh buyers are advised to take any position at current levels... One can look to buy either at Rs 800 with a stop loss Rs 677 for the two-year target of Rs 1,950-2,000 or above Rs 1,100 with a stop loss at Rs 915," he said.

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On November 18, Paytm shares made a lukewarm debut on stock exchanges BSE and NSE, listing at a discount of around nine percent.

Paytm shares have continued to hit a series of lows in the recent past, despite the company's positive business updates and upbeat management commentary.

Earlier this month, Paytm said in a business update that its loan disbursals saw a four-fold jump to Rs 2,180 crore in the December quarter on a year-on-year basis. The company's gross merchandise value (GMV) more than doubled to Rs 2.5 lakh crore in Q3 from Rs 1.1 lakh crore in the year-ago period.

Paytm's IPO was the biggest of all time in India. It saw an overall subscription of 1.9 times the shares on offer. Though fully subscribed, the share sale failed to win the kind of investor interest enjoyed by a majority of IPOs in 2021.

ALSO READ: Can investors make fresh entry in Paytm shares?

Paytm is yet to report its financial results for the quarter ended December.

For the quarter ended September 2021, Paytm's net loss widened 8.5 percent on year to Rs 473 crore. Its revenue, however, increased 63.6 percent to Rs 1,086.4 crore.

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(Edited by : Akanksha Upadhyay)

First Published:Jan 24, 2022 2:56 PM IST