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Shares of One97 Communications Limited, the parent firm of Paytm, fell sharply in early trade on Monday after the company reported its Q2FY22 results.

Paytm shares declined 4.6 per cent in early trade, but have made up some ground. Paytm shares traded 0.22 per cent lower at Rs 1,778 on the National Stock Exchange (NSE) at 10:40 am. It was down 0.23 per cent on the Bombay Stock Exchange (BSE).

From the magazine | Paytm IPO: What the crash foretells

WHY PAYTM SHARES FELL IN EARLY TRADE?

Shares of Paytm fell sharply after Monday’s opening as the company reported a wider net loss of Rs 473 crore in the second quarter, compared to Rs 437 crore in the same period a year ago.

While Paytm’s revenue from operations rose 64 per cent year-on-year to Rs 1,090 crore, the fact the company failed to narrow its losses could have led to today’s fall. In a statement, Paytm’s management said: “We have maintained the growth momentum in our payments services business, expanded our financial services business aggressively and are on our way to pre-Covid volumes for commerce and cloud services.

“We are well funded with pro forma cash, cash equivalent and investable balance of 11,000 crore (Rs 2,900 crore as of September 2021 and Rs 8,100 crore of net IPO proceeds) and have a large cushion of ungranted ESOPs,” the company said.

Paytm shares fell today after recovering for the past few sessions, making up significant ground following its disastrous stock market debut. Despite recovering sharply, Paytm shares remain substantially below the company’s IPO issue price of Rs 2,080-Rs 2,150.

Explained: What Paytm’s stock market debut means for future IPOs

Many analysts continue to raise questions over Paytm’s high valuation and path to profitability. Foreign brokerage Macquarie, which had sharply criticized Paytm’s valuation recently, maintained its rating on the digital payment firm and kept its price target constant at Rs 1,200 following the company’s quarterly results.

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India today

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