Paytm shares enjoyed a dream run until a recent bump. Will it struggle to command a high valuation?
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A man shops at a grocery store where a barcode for Paytm is displayed at a market in New Delhi on November 18, 2021.
Synopsis
As competition soars in its core payments business sector and loan growth slows, shares of fintech company Paytm have slid, though it is still a stellar performer when compared with the New Age stocks. A lot hinges on the growth of its loan business for it to command a higher valuation.
Shares of One97 Communications, better known as Paytm, took a beating after it unveiled its second-quarter results, falling around 6%. The stock is still up 72% for the year-to-date (YTD) period and is among the best-performing New Age stocks that hit the public market in recent years. To be sure, the meltdown in the stock this week was also attributed to a decline in the broader market and a steep one at that for the mid- and small-cap indices.
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