Paytm share price has fallen 36% from the IPO price of Rs 2,150, including yesterday’s plunge, but analysts advise avoiding buying the stock even at these levels. Share price of One97 Communications, Paytm’s parent company, fell as much as 13.22% intraday today to Rs 1,296 after the lock-in-period for its anchor investors ended. The stock later cut partial losses and was trading at Rs 1,420, down 5%, and closed at Rs 1,380, down 7.72% for the day. Paytm scrip has logged losses in 12 out of 19 trading sessions since listing in November. Paytm’s expensive valuations have been cited as the reason behind the plunge in its stock price.

Check live price: Paytm

Should you buy, hold or sell Paytm stock?

Hold, don’t buy more

As Paytm stock is highly valued at these levels, only long-term players should hold for a target of 2,400 in next 2 years, said Ravi Singhal, Vice Chairman, GCL Securities Ltd.

Ravi Singh, Vice President & Head of Research, Share India said, “Paytm share price is taking cues from the negative sentiments of the benchmark indices, and is expected to touch the levels of Rs 1100 in next trading sessions. Existing investors may hold their positions with a stop loss of Rs 1150. Fresh buy should be avoided at the current juncture.”

“On the higher side Paytm is facing resistance near the 1750-1800 zone. Whereas, on the lower side, the demand zone is seen at 1270-1300 levels. Till the stock is sustained near the demand zone, there are chances to bounce back till 1480-1570 levels. Any penetration on the lower side may face further supply. At this moment, we would like to wait and watch for the price behavior for the next couple of days for any comment,” said Vishal Wagh, Research Head, Bonanza Portfolio Ltd.

Paytm share price target, trading range

“Following a sharp decline after the lock-in period ended for anchor investors, Paytm is finding buying interest at lower levels however 1700 may act as a supply point and it may remain in the 1300-1700 range until the market determines its right value. If it manages to sustain above 1700 level, it may see further buying interest, and it might find strong support between 1200-1300 range, said Parth Nyati, Founder, Tradingo.

He added that Paytm’s greatest strength is its huge customer base and strong brand positioning, however, low entry barrier businesses lack a clear moat. “Paytm will use its strengths to enter new businesses or to create moats. If Paytm manages to emerge as a leader in a particular business then it will be possible to expect buying interest at lower levels otherwise it may take many years to reach its peak valuation,” Nyati said.

“Paytm Shares has seen selling pressure since its listing owing to higher valuations. India’s largest initial public offering (IPO) last month on Wednesday its lock-in period for its anchor investors ended and stock has plunged around 10%, however, I believe in long term stock might do well as I see decent growth in India’s digitalization and penetration might increase in rural and semi-urban cities. Rs 1200-1250 is immediate support range where stock which is important to hold, stock might touch Rs 1750-1850 by the end of 2022,” said Harsh Patidar, Senior Research Analyst, CapitalVia Global Research Ltd.

First published on http://www.financialexpress.com on Wednesday (15 December 2021)