Following Macquarie’s warning about Mukesh Ambani’s financial foray, Paytm experiences a record low.

by Mapping Returns
Following Macquarie's warning about Mukesh Ambani's financial foray, Paytm experiences a record low.

The parent company of Paytm, One97 Communications, saw its shares fall to an all-time low on Tuesday after Macquarie Group analysts warned of potential dangers associated with Mukesh Ambani, a billionaire, entering the financial services industry with Jio Financial Services.
Reliance Industries Ltd.’s Jio Financial Services Ltd. “may pose a major growth and market-share risk” for competitors like Paytm and Bajaj Finance, according to a note from Macquarie Group analysts lead by Suresh Ganapathy.

The company’s shares dropped more than 11% in Mumbai, approaching their lowest point since the company’s market debut in November of last year. In today’s afternoon trades on the NSE, shares of Paytm were trading 9.23% lower at 487.45 per share.

The platform’s losses increased and SoftBank Group Corp. decreased its stake in Paytm, causing the stock to fall as much as 75% from its offering price. The stock lost 23% over the previous week.
JFS may surpass the fifth-largest fintech company.
RIL recently announced plans to demerge and rebrand its financial services division as Jio Financial Services. According to a forecast by Macquarie analysts, JFS could surpass the HDFC twins, SBI, ICICI Bank, and Axis Bank to rank fifth among Indian financial services companies in terms of net worth.
According to Macquarie analysts, RIL already has a licence for a non-banking financing company, which it can use to significantly increase consumer and merchant loans.

Paytm has a target price of 450 set by analysts, who rate the company as underperform.
The warning follows RIL’s announcement that it will separate and float its financial services division in order to increase its position across consumer businesses. For Paytm, which has struggled since its $2.3 billion IPO last year—one of the largest offers in India’s history—this presents a new obstacle.
Prashanth Tapse, an analyst at Mehta Securities, continued, “Jio’s proposal has increased problems for Paytm. New investors find it challenging to maintain confidence in these stocks due to the consumer technology companies’ falling valuations.

End of Paytm lock-in period
The lock-in period for the pre-offer investors who had invested in Paytm, which was launched on the bourses in November 2021, concluded earlier in November.

According to data on large transactions held by the National Stock Exchange (NSE), SVF India Holdings (Cayman) Ltd. sold over 2,93,50,000 shares, totaling 4.5% of the company.

A SoftBank subsidiary is SVF India.

At an average price of 555.67 rupees per share, the shares were sold, bringing the total transaction value to 1,630.89 crore.

SoftBank holds a 17.45% stake in the business, making it the second-largest shareholder.
After the transaction, SoftBank’s stake in the industry leader in digital payments will drop from 17.45% to 12.95%.

with agency involvement

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