Paytm shares hit record low; Is Jio the real threat?

Investors of fintech giant Paytm is really having a tough time as Paytm shares hit their record low of Rs 476 on November 22 after plunging as much as 11%.

According to reports, the immediate cause for the fall in Paytm’s stock price seems to be a report from investment firm Macquarie, which said that Jio’s entry into financial services created additional risks for Paytm.

Macquarie analysts said that Jio Financial Serives ''can pose a significant growth and market-share risk” for players such as Paytm and Bajaj Finance Ltd,

The latest fall in Paytm’s stock comes right after the year-long holding period for its pre-IPO investors had expired. On 17th November, exactly a year after Paytm had gone public, its second-biggest investor Softbank had sold a 4.5% stake in the company for Rs. 1,630 crore. Softbank had acquired these shares at a price of Rs. 900 per share, but ended up selling them for Rs. 555 a share. Softbank incurred a loss, but it might have been a pruddent decision – Paytm’s stock now trades 14% below the price at which Softbank had sold shares just a few days ago.