The expensive valuation of Paytm is being said to be the reason for the fall in its share price. In such a situation, the question is whether investors should hold its shares, should they buy or sell.
Paytm: With today’s fall, the share price of Paytm has fallen by almost 35% from the IPO price of Rs 2,150. Analysts have advised to avoid buying the stock even at this level. The share price of Paytm’s parent company One97 Communications fell 13.22% to Rs 1,296 in intraday. However, there was some improvement in it later and it was trading at Rs 1,420 with a fall of 5%. Paytm shares have been in losses in 11 out of 18 trading sessions since listing in November. The costly valuation of Paytm is being cited as the reason for the fall in its share price. In such a situation, the question is whether investors should hold its shares, should they buy or sell.
Hold but don’t buy more shares
Ravi Singhal, Vice Chairman, GCL Securities Limited said that only long term investors should hold it with a target of 2,400 over the next two years. Ravi Singh, Vice President and Research Head, Share India said, “Paytm share price is likely to fall towards Rs 1100 level in the next trading session due to negative sentiments in the benchmark index. Existing investors can hold their position with a stop loss of Rs 1150. At present, new purchases should be avoided.
Vishal Wagh, Head of Research, Bonanza Portfolio Limited said, “On the higher side, Paytm is facing resistance near the 1750-1800 zone. At the same time, the demand zone on the lower side is visible at the level of 1270-1300. As long as the stock remains near the demand zone, it is likely to bounce back to 1480-1570 levels. At this juncture, one should wait and see for the next few days before making any comments.”
paytm share price target trading range
“Its shares saw a sharp decline after the lock-in period for anchor investors was over. 1700 may act as a supply point and may remain in the 1300-1700 range until the market determines the correct value. Parth Nyati, Founder, Tradingo says that if it sustains above the 1700 level, it may show further interest and may find strong support in the 1200-1300 range.
He further said that the biggest strength of Paytm is that it has a large number of customer support and a strong brand. Paytm will use its power to enter new business. If Paytm emerges as a leader in a particular business, investors at a lower level can take an interest in it. If not, it may take several years to reach its peak valuation.
(Article: Harshita Tyagi)
(The stock recommendations given in the story are from the respective research analyst and brokerage firm. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.
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