Stakes in Paytm held by foreign portfolio investors Societe Generale, UBS Principal Capital Asia, and Tiger Pacific Master declined in the September 2024 quarter to below 1 percent.
While it remains unclear if the three investors have exited the firm completely, as the BSE data doesn’t show details for shareholders with less than 1 percent stake, the selloff contributed to the overall drop in foreign institutional ownership, including FPIs and FDIs, which fell from 58.24 percent in June to 55.53 percent by September.
In the June quarter, Societe Generale held a 1.98 percent stake (12.57 million shares), UBS Principal Capital Asia Ltd 1.06 percent (6.76 million shares), and Tiger Pacific Master Fund 1.03 percent (6.58 million shares). By the end of September, these stakes fell below 1 percent, resulting in their exclusion from the latest publicly available data.
Also read: Japan’s SoftBank exits Paytm, sells remaining 1.4 percent stake
The overall foreign portfolio investor (FPI) ownership in Paytm fell to 16.77 percent by September, down from 20.04 percent in June. Foreign Direct Investment (FDI), which includes investments from SAIF Partners, Antfin and Resilient Asset, remained almost unchanged.
Mutual Funds, retail investors adjust holdings
Indian mutual funds raised their stake in Paytm during the September quarter, with their combined ownership growing from 6.8 percent in June to 7.86 percent. Among the mutual funds increasing their exposure were Nippon Mutual Fund and Mirae Mutual Fund.
Retail investors, in contrast, saw a decline in their stakes, with the retail pie shrinking from 14.28 percent in June to 13.19 percent in September. The number of small shareholders, defined as those with holdings under Rs 2 lakh, dropped from 1.14 million to 1.03 million.
Also read: Large trade in Paytm shares: Rs 328-crore equity stake changes hands; stock jumps 3%
Indian investor Akash Bhansali, a promoter of Enam Holdings, increased his stake in Paytm from 1.21 percent in the June quarter to 1.24 percent in September. Bhansali had first entered Paytm during the April-June quarter as its stock price hit a low, and his holding has since grown.
Shares of One 97 Communications, which runs Paytm, traded down 2.38 percent to Rs 704.75 at 12:44pm on Thursday.
In September 2024, the Paytm stock regained momentum, crossing the Rs 700 mark for the first time since January 2024, when the Reserve Bank of India's crippling curbs on Paytm Payments Bank knocked down the share price.
The stock has been on a recovery path since hitting an all-time low of Rs 310. The company recently received approval from the finance ministry to further invest in its payment services business, adding further confidence.
Emkay said that Paytm's loan distribution business is expected to accelerate, while its broking and insurance distribution segment has turned profitable. Additionally, the company’s decision to divest its operationally heavy entertainment business (ticketing business to Zomato) is expected to bolster the cash reserves.
Paytm remains open to selling off other non-core assets to focus on profitability, with Emkay projecting that the company will turn EBITDA positive by Q4 of FY25.
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