Technically, the stock is in a bearish trend on both a daily and a daily basis and could hit the Rs 500 level in the near term, one analyst said.
One97 Communications’ parent company of Paytm, a major digital payments company, fell to a new all-time low of Rs 616.55 apiece on Tuesday, leading Paytm to drop out of the BSE’s top 100 most valued companies by market capitalization. The stock has crashed 60 per cent in less than four months since its debut on the exchange, taking 71 per cent off its IPO price of Rs 2,150 each. The stock’s decline was extended after the Reserve Bank of India (RBI) banned Paytm Payments Bank Ltd from accessing new customers. This stock shows a declining trend after RBI banned Paytm Bank.
“It may fall further because the trend is bearish. It can test from 550 to 500 levels,” Anuj Gupta, Vice President, IIFL Securities, told FinancialExpress.com. In terms of volume traded, 13.37 lakh shares have traded on BSE so far on the day, while 1.62 crore shares have traded on NSE. Analysts said RBI’s recent ban on Paytm from onboarding new customers has sparked more panic over its business sentiments.
Paytm Shares May Hit Rs 500 Level in Short Term
“This has fueled the negative impact and increased selling pressure in the stock. However, Paytm already has a very large customer base aboard the payment bank, but the ban could affect their chances of upgrading to a small financial bank,” Ravi Singh, VP & Head of Research, Share India Securities, told FinancialExpress .com Singh added that the stock is technically in a bearish trend on both a daily and a daily basis and could hit the Rs 500 level in the near term.
Avoid Paytm Stocks Until There Is Clarity About Profit Generation
Likhita Chepa, Senior Research Analyst at CapitalVia Global Research, advised investors to stay away from the Paytm stock as there is no clarity on when the company could start generating profits. Also, with increasing competition, it will be difficult for the company to make a profit at this time. “It has been observed that the company’s losses have increased and it seems that the company can no longer see its way back. RBI has also ordered Paytm to stop boarding new customers, which has also severely affected its already-defeated inventory,” Chepa added.
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