Paytm shares hit fresh 52-week on huge block deal; Antfin likely seller
Shares of One 97 Communications, the parent company of Paytm, rose nearly 4% to hit a fresh 52-week high in opening trade on Friday, driven by a surge in volume amid a report that its promoter Antfin is likely to dilute its stake in the fintech company. Chinese e-commerce giant Alibaba Group subsidiary Antfin is looking to sell a 3.6% stake, or 2.3 crore shares, in the payment solutions company through a block deal today.
The floor price for the block deal is likely to be at a discount of ₹880.10 per share, a 2.7% discount to Thursday's closing price. The value of the transaction is estimated to be around ₹2,024 crore.
Paytm shares opened 1.2% higher at ₹915 against the previous closing price of ₹904.2 on the BSE. In the early trade so far, the counter gained as much as 3.8% to ₹939, while the market capitalisation rose to ₹58,357 crore. On the volume front, 2.28 crore shares changed hands over the counter compared to a two-week average of 1.52 lakh stocks.
In the previous session, Paytm shares surged 2.8% in intraday trade to hit a 52-week high of ₹931 after the global research and brokerage firm Alliance Bernstein LLP recommended ‘outperform’ rating to the fintech major. However, the stock ended 0.15% lower at ₹904.20, paring early losses amid a surge in selling activities in the final hours of day’s trade, in sync with the broader market.
Paytm share price has witnessed decent growth in the last nine months, especially in the calendar year 2023, as the stock has jumped 113% from its 52-week low of ₹439.60 touched on November 24, 2022. In the last one year, the largecap stock has risen 19%, while it surged over 72% in the calendar year 2023. The counter has risen 44% in the six month period and 16% in a month. In the past one week, the fintech stock has added over 7%.
Earlier on August 7, Paytm had informed exchanges that Antfin would transfer its 10.3% stake in the fintech company to its founder and chief executive Vijay Shekhar Sharma through his 100% owned overseas entity, Resilient Asset Management B.V. After the deal, Antfin's shares in One 97 Communications will come down to 13.5%, while Sharma’s stake will rise to 19.42%, making him the largest single shareholder in the company.
"Antfin (Netherlands) Holding B.V., one of the shareholders of One 97 Communication, hereby file the disclosure in the format prescribed under Regulation 29(2) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, with respect to disposal of 65,335,101 equity shares of the company, resulting into change in shareholding of more than 2% of the total equity share capital of the company," Paytm had said in the regulatory filing.
As per the agreement, Antfin will be issued Optionally Convertible Debentures (OCDs) by Resilient Asset Management B.V. in consideration of the transfer of ownership and voting rights. This will allow Antfin to retain the economic value of its 10.30% stake in Paytm.
The company also informed exchanges that post this transaction, there will be no change in the management or control of Paytm as Sharma would continue as managing director and CEO, along with the existing board members. However, there will be no nominee of Antfin on the board of Paytm.
For the first quarter ended June 30, 2023, Paytm reported a consolidated net loss of ₹357 crore compared to a loss of ₹644 crore in the corresponding period last year and ₹168 crore in the March quarter (Q4 FY23).
The consolidated revenue from operations jumped 39.4% to ₹2,341 crore in Q1 FY24, from ₹1,679 crore in the year-ago period. However, it was flat as compared to ₹2,334 in Q4 FY23. The YoY growth in revenue was driven by an increase in merchant subscription revenues as well as Gross Merchandise Value (GMV) and growth in disbursements of loans through its platform, Paytm said in a release.
The contribution profit for the first quarter was up 80% YoY and 2% QoQ to ₹1,304 crore. The margin increased by 1,248 basis points (bps) YoY and 72 bps QoQ to 56%.
At the operating level, EBITDA before ESOP improved to ₹84 crore, with margins at 4%, on the back of an increase in contribution margin and operating leverage.
During the quarter under review, the number of loans distributed through the Paytm platform grew to 1.28 crore, up 51% YoY, while the value of loans distributed surged 167% YoY to ₹14,845 crore.
In Q1 FY24, revenue for financial services and others grew 93% YoY to ₹522 crore on account of the increase in repo rates over the last year. The payments revenue grew by 31% YoY to ₹1,414 crore, led by an increase in GMV and higher subscription revenue. As of June 2023, the merchant subscriptions were 79 lakh, increasing 41 lakh YoY and 11 lakh QoQ.
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