Large shareholding by Chinese investors in the company can create roadblocks from a regulatory point of view
The value of Paytm founder Vijay Shekhar Sharma’s stake in the company has fallen to less than $1 billion after the share price dropped to a new low.
Shares of One 97 Communications, the parent company of Paytm, declined 2.77 percent to a record low of Rs 840.05 on the BSE on February 15.
The value of Sharma’s shares have eroded by over $1.5 billion since listing about three months ago. Sharma lost an average of about Rs 128 crore of stake value every day since listing.
Sharma’s stake in Paytm is currently valued at $998 million, down about $1.59 billion since listing. According to the Forbes billionaire list, Sharma’s wealth is currently at $1.3 billion.
Sharma owned 57.67 million shares, or an 8.9 percent stake, in One 97 Communications, as of the December quarter, according to a company spokesperson. Additionally, Axis Trustee Services holds 30.97 million shares, or 4.8 percent stake, on behalf of Sharma.
The company’s shares have nosedived almost 63 percent since they listed on the stock exchanges on November 18. Sharma’s stake was valued at $2.58 billion at the IPO price of Rs 2,150 a share.
The stock has eroded about Rs 85,000 crore of investor wealth from the IPO valuation of Rs 1.39 lakh crore.
Last week, the company reported a loss of Rs 778.50 crore for the December quarter, widening from Rs 481.70 crore a year ago. Revenue from operations rose 89 percent to Rs 1,456 crore.
Analysts are divided on the stock. Global investment bank Macquarie once again slashed Paytm’s share target price to Rs 700, while Goldman Sachs upgraded Paytm to a ‘buy’ with a target price of Rs 1,460.
Morgan Stanley Asia (Singapore) Pte, one of the lead managers of the Paytm initial public offering, was not on the list of key company shareholders as of the quarter ended December. Morgan Stanley held 7.82 million shares, or a 1.21 percent stake, in Paytm, according to data for the September quarter.
However, it is not clear whether the brokerage has sold its entire stake in Paytm or its ownership has come down to less than 1 percent.
Morgan Stanley’s research arm said on December 22 it was ‘overweight’ on the Paytm stock with a target price of Rs 1,875.
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