The shares of the leading payment aggregator gained up to 3.1 percent after the company’s wholly-owned subsidiary approved the sale of Stock Acquisition Rights (SARs) held in PayPay Corporation, Japan.
With a market capitalization of Rs 62,573.31 crore, the shares of One 97 Communications (NS:PAYT) Ltd were trading at Rs 982.10 per share, increasing around 0.65 percent as compared to the previous closing of Rs 975.80 per share.
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Reason for Rise:-
Today, the company shares have seen positive movement after One 97 Communications Ltd’s wholly-owned subsidiary approved the sale of Stock Acquisition Rights (SARs) held in PayPay Corporation, Japan.
Moreover, 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. The transaction is expected to be closed in December 2024 subject to the satisfactory completion of all corporate approvals and customary closing conditions.
Furthermore, the Board of Paytm Singapore has approved the sale of the above-mentioned SARs as they have created significant value for the Company. The SAR sale net proceeds would fortify the consolidated cash reserves of OCL and help drive future business initiatives, focused on maximizing value creation for shareholders.
Financial Performance:-
Looking forward to the company’s financial performance, revenue dipped by 34 percent from Rs 2,519 crore in Q2FY24 to Rs 1,660 crore in Q2Y25. During the same period, net loss stretched into profits by 418 percent, from a loss of Rs 292 crore to a profit of Rs 930 crore.
Future outlook:-
Management is optimistic about growth in merchant and personal loans, citing strong demand and improving asset quality. While no EBITDA margin guidance is given, profitability is expected soon. Cash reserves may return to shareholders after ensuring sustainable free cash flow generation.
Market Positioning:-
Paytm aims to expand its UPI consumer market share by leveraging its customer base and technology. It focuses on enhancing consumer and merchant payment offerings while optimizing monetization strategies to strengthen its position in the digital payments ecosystem.
Ratio analysis:-
The company’s critical ratios show that the return on equity recovered from (15.10) percent in FY22-23 to (11.96) percent in FY23-24, while the return on capital employed increased from (13.88) percent to (9.77) percent. The net profit margin (NPM) for fiscal year 23-24 is -(9.26) percent..
Shareholding pattern:-
In the company’s recent shareholding pattern, foreign Institutional Investors own 55.53 percent while Retail shareholders own a 36.17 percent stake in the company and domestic Institutional Investors own an 8.29 percent stake.
Company Snapshot:-
One 97 Communications (Paytm) Limited is one of India’s leading payment solutions providers in India with a digital ecosystem offering consumers and merchants a wide range of services including comprehensive payment solutions, payment facilitator services, facilitation of consumer and merchant lending, wealth management, insurance broking services, and more.
Written by:- Abhishek Singh
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