Paytm Shares Surge 3% to 52-Week High After Stake Sale to SoftBank

Paytm Shares Surge 3% to 52-Week High After Stake Sale to SoftBank

---

### Stock Market Today: Paytm's Parent Company Shares Surge

Shares of One 97 Communications, the parent company of fintech firm Paytm, soared over 3% to a new 52-week high of ₹1,007 on Monday, December 9. This uptick followed the company's announcement regarding the sale of its stake in PayPay Corporation to SoftBank.

One97 Communications Singapore Private Limited, a wholly-owned subsidiary of Paytm, revealed that its board had approved the sale of all its Stock Acquisition Rights (SARs) in Japan's PayPay Corporation to SoftBank Vision Fund 2. The net proceeds from the deal amount to JPY 41.9 billion, approximately ₹2,364 crore.

The valuation of PayPay through this transaction stands at JPY 1.06 trillion. Consequently, the SARs held by Paytm Singapore are valued at net proceeds of JPY 41.9 billion, after accounting for the exercise cost of SARs, as stated in an official exchange filing. The transaction is expected to close in December 2024.

### Deal Rationale

Paytm Singapore endorsed the sale, citing substantial value creation. The proceeds from the SARs sale will bolster the consolidated cash reserves of One97 Communications Limited and support future business initiatives aimed at maximizing shareholder value.

### Stock Price Performance

Paytm's share price has been on an upward trajectory, rallying for the fourth consecutive day and gaining over 9.5% during this period. From its 52-week low of ₹310 in May, the stock has surged by an impressive 225%. Over the past year, the stock has recorded a 49% gain.

This marks a significant recovery for Paytm's stock, which faced a severe downturn earlier in the year following the Reserve Bank of India's (RBI) restrictions on Paytm Payments Bank Ltd (PPBL). The RBI had barred PPBL from accepting deposits or top-ups for customer accounts, wallets, or FASTags starting February 29.

Monday's rally pushed the stock above the ₹1,000 mark, surpassing recent target price upgrades from global brokerages UBS and Bernstein. Last month, UBS raised its target price for Paytm to ₹1,000 from ₹490 per share while maintaining a neutral stance. Similarly, Bernstein increased its target price to ₹1,000 from ₹750 apiece.

UBS noted that Paytm's next phase of growth must be driven by revenue, as most cost optimization efforts have already been realized.

As of 10:25 am, Paytm's share price was trading at ₹984.75 per share, up 0.92% on the BSE.

--