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Paytm sinks to record low as Macquarie India sees more pain ahead

Following the nation’s biggest-ever initial offering after a key brokerage house further cut its price on the payments stock, shares of Paytm has seen a drop to ₹1,165, the lowest since its market debut in November. The stock, which opened Monday at ₹1,226, dropped 5.3% at 1.55 pm India standard time. With this Paytm has slid by over 45% from its issue price of ₹2,150, that has seen some level of struggle ever since its debut. The firm’s market cap, at the time of publishing, was $10.2 billion, nearly half of what it had sought during the debut and below the $16 billion valuation at which it raised a financing round in late 2019.

Macquarie was the only brokerage firm which had such a grim view on Paytm’s outlook at the time of market debut. Analysts at Bernstein, in comparison, had estimated that Paytm’s valuation will swing between $21 billion to $24 billion.

“Post the various business updates and results, we believe our revenue projections, particularly on the distribution side, is at risk and hence we pare down our revenue CAGR from 26% to 23% for FY21- 26E. We are roughly cutting revenue estimates for FY21-26E on an average by 10% every year due to lower distribution and commerce/cloud revenues offset partially by higher payment revenues,” Macquarie analysts wrote Monday.

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