Is Paytm Finally Out of the Blues? Shares Touch Rs 1,000, Becomes Multibagger in 5 Months

Paytm Share Price: The shares of the company hit an all-time high at Rs 1,000 on Monday before erasing most of the gains during the closing time. While Paytm shares have already been on an upward trajectory, a major push came after the company's Singapore unit announced the sale of its Stock Acquisition Rights in Japanese Payments Firm PayPay.

Stock Acquisition Rights are usually a type of employee compensation but more like a financial instrument that grants the holder the right to purchase shares after a vesting period.

On Monday, the shares of the company concluded the trading session at Rs 969.70, down by 0.67 per cent on the National Stock Exchange.

In September 2020, Paytm Singapore acquired the rights to buy shares in PayPay, a Japanese Company. Now, it plans to sell these rights to a SoftBank Vision Fund 2 entity for JPY 41.9 billion after deducting costs.

"These SARs, acquired by Paytm Singapore in September, 2020 will be sold to a SoftBank Vision Fund 2 entity for net proceeds of JPY 41.9 billion. Through this deal, PayPay is valued at JPY 1.06 trillion and accordingly, PayPay SARs held by Paytm Singapore are valued at net proceeds of JPY 41.9 billion (after netting off the exercise cost of SARs)," the company said in its exchange filing.

The recent sale of stock acquisition rights in PayPay is also anticipated to enhance the company's growth outlook as the proceeds will significantly bolster Paytm's cash reserves, aiding future growth initiatives and strategic expansions, according to Abhishek Pandya, research analyst at StoxBox.

"We continue to maintain a bullish outlook on Paytm stock from a medium to long-term perspective," he further added.

Paytm's share price trajectory

After witnessing a sharp fall in January-February month, when RBI banned Paytm's banking arm PPBL (Paytm Payments Bank Ltd.), the fintech firm has witnessed a steady rise in its share price.

A major transition in the subdued investor sentiment came after the company sold its ticketing business to food-delivery platform Zomato. This has even resulted in the company posting profits for the very first time in the second quarter of FY25.

The PAT (profit after tax), a one-time-gain for Paytm, stood at Rs 928 crore during that period.

"A decisive move above Rs 1,000 will confirm renewed bullish momentum and open the path to higher targets. However, traders and investors should remain vigilant, watching price action near key support and resistance zones and entering positions only upon confirmation of reversal patterns to optimize returns," said Mandar Bhojane, Equity Research Analyst.

In the last 5 months, Paytm's shares have delivered multibagger results of more than 118 per cent on the bourses. On year-to-date basis, the shares of the company have surged by more than 50 per cent on NSE.