Shares of One97 Communications, the parent company of Paytm, hit an all-time low today. The company’s shares fell 12.71% to close at Rs 589, a discount of 72.60% from its IPO price of Rs 2,150. The company’s shares had suffered a week sharp drop of 21.34% in the last five days before today’s order by the Reserve Bank of India banning Paytm Payments Bank from onboarding new accounts caused another plunge.
What do we know so far?
Why was Paytm stock down?
Previous losses were driven by investors’ loss of risk appetite in the face of global macro conditions – rising hatred of the Federal Reserve, Russia’s invasion of Ukraine, and generally lackluster performance of tech and newcom stocks. age.
Does it make sense to buy Paytm now?
While buying the dip is always a good idea, many experts suggest that this may not be the bottom of the dip for One97 Communications. With stretched valuations that have been based on potential future activity rather than current offerings, investors have largely lost the courage to stick with tech growth stocks in a volatile market environment.
“No one is going to commit and buy into it, especially when there is such a big area of concern that needs to be fixed… The valuation will certainly start to look even more expensive than it did at the time of the IPO.” said market expert Prakash Diwan.
Market veteran Shankar Sharma told CNBC-TV18 in January that it wouldn’t be surprising to see new-age businesses plummet 80-90% by the end of 2022.
Prior to RBI’s action, rating agencies had maintained a target price between 1,300 and 2,300 rupees.