As per the latest shareholding data, mutual funds held a 14.34% stake in Paytm at the end of the December quarter, down from 16.25% at the end of the September quarter.
At the end of the September quarter, Motilal Oswal MF, Nippon India MF, Mirae Asset MF and Bandhan MF featured as the prominent funds who held stake in Paytm. In the December shareholding, while the first three names have all trimmed their stake, Bandhan MF’s name does not feature in the list. This either means that the fund’s stake has dropped below the 1% mark, or it has made its exit from the stock.
On the flip side, retail shareholders continued to sell the stock with their shareholding declining for the seventh quarter in a row. For retail shareholders, or those who have an authorized share capital of up to Rs 2 lakh, their shareholding in Paytm has dropped to the lowest level since September 2023.
With both mutual funds and retail investors trimming their holdings, the key question now is what lies ahead for Paytm’s shareholders?
Last month, Goldman Sachs upgraded the stock to Buy from Neutral, signalling a renewed positive stance on the fintech major. The brokerage sharply raised its price target to Rs 1,570—more than double its earlier projection of Rs 705—indicating a potential 20% upside from current levels.
The brokerage said the regulatory backdrop, which had weighed on the stock in the past, is gradually improving and is already showing up in early gains in Paytm’s payments market share, clearer earnings visibility, and the phased return of key offerings. Together, these factors are expected to support revenue growth of over 20% in the medium term.Jefferies says Paytm is its preferred pick in the fintech sector due to rising option value across wealth, lending and international segments. The global brokerage has recently raised the target price to Rs 1,600, a 22% upside from the current levels, as it sees the digital payments company at an inflection point to scale-up new segments that will leverage its distribution and customer base. “Stronger momentum in earnings will support premium valuations and compounding.”
YES Securities has an add rating on the stock with a target price of around Rs 1400. Emkay too believes the risk-return is attractive for a target of Rs 1,600.
Ventura said the company has significantly improved its business position, achieving profitability and strong revenue growth through operational and strategic shifts. The broker anticipates Paytm’s MTUs and subscription paying device merchant base could increase from 74 million and 13 million in Q1FY26 to 95 million and 22 million, respectively by FY28E, while payment GMV could improve from Rs 18.7 lakh crore in FY25 to Rs 33.9 lakh crore by FY28E.
Following Q2, Axis Capital has raised its FY27–28 EBITDA estimates by 33–46%, citing improved payment margins, scaling up of financial services, and tighter operating costs. It upgraded the stock to a ‘buy’ with a target price of Rs 1,500, valuing it at about 41 times FY28 estimated EV/EBITDA. However, the brokerage cautioned that any deterioration in lending asset quality remains a key risk.
The brokerage believes Paytm’s omnichannel presence in merchant payments and improving profitability metrics are key reasons behind mutual funds’ bullishness. According to Axis Capital, Paytm operates one of the largest offline merchant networks in India, with about 13 million devices — including soundboxes and electronic data capture (EDC) machines — across small and large enterprises. It is also among the top four online payment aggregators by gross merchandise value (GMV).
As the company’s merchant relationships mature, analysts see strong potential for monetization through cross-selling of lending products or price hikes on devices and services. Axis Capital noted that Paytm’s pilot project to raise soundbox subscription fees from Rs 100 to Rs 129 has shown encouraging results.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)