- Paytm said that we authenticate that we have not received any such new notice, communication, or interrogation from the Enforcement Directorate.
- At the time of Friday’s session, the shares of Paytm fell around 9%, striking a low of Rs 773.90, before recuperating a bit to trade 3.36% lower.
- The report presented is factually incorrect and misleading as we did not get any query from the media before the publication of this news article, as per Paytm.
Paytm has been recently accused of being involved in a Rs 2,200 crore cryptocurrency scam and is being probed by the Enforcement Directorate (ED). However, the virtual payments company has denied the media reports.
The company mentioned in a stock exchange filing that it had not received any new notice or communication from the Enforcement Directorate. He has also referred to those reports as factually incorrect and misleading.
The claims and the denial
A few media outlets have reported claiming that the ED is probing eight virtual payments firms such as Paytm, Razorpay, PayU, and many others in a scam consisting of 10 Chinese nationals over 20 states.
The reports have also claimed that the ED has frozen around Rs 500 crore with reference to the case. Responding to the claims, Paytm said that we authenticate that we have not received any such new notice, communication, or interrogation from the Enforcement Directorate related to the matter mentioned in the media articles.
The report presented is factually incorrect and misleading as we did not get any query from the media before the publication of this news article, as per Paytm.
Reports pushed the shares of the virtual payments platform down
At the time of Friday’s session, the shares of Paytm fell around 9%, striking a low of Rs 773.90, before recuperating a bit to trade 3.36% lower at Rs 820.40 at 12:55 pm IST. It is noteworthy that the fintech stock has been under pressure, slumping 10% in the last five trading sessions and losing 17% since the start of this year.
The latest results of the third quarter of Paytm have also hurt investor sentiment on Dalal Street. The firm noted a 36% year-on-year slump in revenue to Rs 1,828 crore. At the same time, its net loss shrunk to Rs 208 crore from Rs 222 crore in 2023.
A leading investment banking firm, JM Finance said that Paytm reported an FY21-24 revenue CAGR of 53%, having the firm delivering adjusted EBITDA of about Rs 560 crore in FY24, implicating marginal gradual benefit of 30%.
It further went on to add that we anticipate the firm’s mid-fifties contribution margin to broaden further by 500 basis points (bps) in 5 years, fueled by take-rates rising over its commission/subscription-based revenue income.
Also, it mentioned that we value Paytm at 70X FY27E PER leading to the March 26 aimed price of Rs 1,250. We reinstitute ‘Buy.’
