Paytm shares climb over 2%, rise for the fourth straight day on potential MSCI re-entry

Paytm rides higher for the fifth month

Shares of One97 Communications, the parent company of payments aggregator Paytm, rose over 2 percent to close at Rs 999 per share on July 15. This marked the stock’s fourth consecutive day of gains. With this move, Paytm has now climbed 6.6 percent in July so far.

The gain this month also extends Paytm’s winning streak to five straight months. The stock had already gained 4 percent in June, 3 percent in May, 10.4 percent in April, and 9.6 percent in March this year. Earlier, the stock had posted losses of 24 percent in January and 8 percent in February.

Brokerage firm Motilal Oswal said there is a high probability that Paytm may move back into the MSCI Standard Index from the Smallcap Index in the upcoming MSCI rebalancing in August.

If that happens, Motilal Oswal estimates it could lead to inflows worth 212 million dollars into the stock when adjustments are made. The MSCI announcement is expected on August 8, and the changes will take effect from August 26.

According to the latest shareholding data for the June quarter, domestic mutual funds have continued to increase their stake in the company.

As of June 30, Indian mutual funds collectively held a 13.86 percent stake in Paytm, up from 13.11 percent in March. Among the prominent domestic investors are Mirae Asset Mutual Fund (3.2 percent), Motilal Oswal Mutual Fund (2.61 percent), Nippon Mutual Fund (2.55 percent), and Bandhan Mutual Fund (1.02 percent).

On the other hand, the share of foreign portfolio investors (FPIs) in Paytm has slightly declined from 55.38 percent in March to 54.87 percent at the end of June.

Out of the 19 analysts covering Paytm, nine have a buy rating, seven have a hold, and three have a sell recommendation on the stock.