Domestic Institutional Investors Shore Up Stakes In Paytm In Q4 FY25

Domestic Institutional investors ramped up their shareholding in fintech major Paytm in the fourth quarter (Q4) of financial year 2024-2025 (FY25). 

As per quarterly shareholding pattern filed by Paytm with the stock exchanges, domestic mutual funds increased their stake in the fintech major to 13.11% in the quarter under review from 11.2% in the Q3 FY25. 

This uptick was primarily led by Nippon India Mutual Fund and Motilal Oswal Mutual Fund. While Nippon India increased its shareholding in the company by 0.4% to 2.8%, Motilal Oswal Mutual Fund accounted for a 2.3% stake in the fintech major in Q4 FY25, up 0.2% sequentially. 

On similar lines, homegrown alternate investment funds (AIFs) and insurance companies, too, ramped up their stakes in the listed fintech juggernaut. In Q4 FY25, AIFs accounted for 0.45% stake in the company, up 25% QoQ. 

The participation of homegrown insurance companies also saw a steep jump, soaring 200% QoQ to 0.45% in the recently concluded quarter. 

Overall institutional ownership, comprising both domestic and foreign investors, rose 1% quarter-on-quarter (QoQ) to 69% in the quarter ended March 2024. 

Meanwhile, foreign institutional participation declined to 11.45 Cr shares in the quarter under review from 11.93 Cr shares in Q3 FY25. 

This is largely in line with the broader market volatility which has seen foreign portfolio investors (FPIs) on a selling spree due to a slew of factors such as US tariffs, elevated valuations of Indian equities, concerns about corporate earnings growth, among others. 

However, the push from domestic institutional investors comes despite mixed signals from brokerage firms. Last week, JM Financial reiterated “BUY” rating on the stock but trimmed its price target to INR 1,010 from INR 1,250 earlier. In February, Bernstein maintained its “outperform” rating on the stock with a price target of INR 1,100. 

In March, Motilal Oswal cut Paytm’s target price to INR 870 from INR 950 earlier, while maintaining a “neutral” rating. In the same month, Jefferies, too, maintained its ‘hold’ call on Paytm stock while giving it PT of INR 850. 

While the stock is still down more than 28% year-to-date (YTD), the bullishness of domestic institutional investors comes largely on the back of the fintech major launching a host of new offerings in the past few months to turn profitable. These include a partnership with RBL Bank to offer sound box and card machines to its merchant partners, UPI-enabled trading facilities for retail investors, UPI statement downloads, and integration of Perplexity-enabled AI engine for Paytm users. 

Meanwhile, on the financial front, Paytm reported a net loss of INR 208.5 Cr in Q3 FY25, down 6% from INR 221.7 Cr in the same quarter last year. However, revenue from operations suffered a steep 36% year-on-year (YoY) decline to INR 1,827 Cr in the quarter under review.