Blissfully unaware of the catastrophe that was about to hit Paytm, not just retail investors, but even mutual funds and foreign institutional investors (FIIs) had raised their stake in the new-age stock in the December quarter. After the stock fell 42% in just 3 days, 11 lakh retail shareholders, 514 FIIs and 97 mutual fund schemes are now trapped.

December quarter shareholding pattern shows that MF ownership in Paytm rose from 2.79% to 4.99% quarter-on-quarter. FII holding also rose 280 bps to 63.72% while retail ownership, as defined by those with holdings up to Rs 2 lakh, went up 457 bps to 12.85%.

Top FII investors include BNP Paribas Arbitrage and Canada Pension Plan Investment Board who own over 1% stake each in Paytm. Mirae Mutual Fund was the top investor in the stock as it owned a 2.51% stake in the troubled fintech at the end of the December quarter. Nippon Mutual Fund also owned more than 1% stake in Paytm.

Ace MF data shows that there were at least 6 mutual fund schemes which had over Rs 100 crore exposure in Paytm while around 40 of them had less than Rs 10 crore exposure.

The top schemes invested in Paytm are Mirae Asset Large Cap Fund (Rs 430 crore), Mirae Asset Focused Fund (Rs 269 crore), Quant Mid Cap Fund (Rs 134 crore), Nippon India Large Cap Fund (Rs 127 crore) and Mirae Asset ELSS Tax Saver Fund (Rs 105 crore).

At a fund house level, Mirae’s investment in Paytm at the end of the December quarter was more than Rs 1,000 crore while Nippon MF had Rs 420 crore invested in the stock and Aditya Birla Sun Life Mutual Fund Rs 143 crore.

What should Paytm investors do?

While RBI’s ban on Paytm Payments Bank on non-compliance was enough to send the stock in a tailspin, what aggravated the downfall was the report about the possibility of investigation by the Directorate of Enforcement on money-laundering and KYC norms violation.Bottom-fishing by global investment banking firm Morgan Stanley, which acquired a marginal 0.8% stake in Paytm through the open market for around Rs 244 crore on

Friday, made some retail investors wonder whether they should also fish in troubled waters. However, after the stock opened at a 10% lower circuit on Monday as well, few dared to buy the dip.

Analysts have warned retail investors against catching the falling knife till the regulatory trouble settles down.

“We keep hearing so many things, so it is very difficult to conclude given the volatility where the stock would end and when the problem would start reversing,” said Rahul Jain of Dolat Capital.

Most analysts say it is very tough to predict as to whether the pain will continue or the stock will bounce back.

“But the fact of the matter is that the business has got severely disrupted and what will be the endgame in terms of how the company structure will look at, what will be the contributors to earnings for Paytm in the long term and how many customers they will be able to retain, all of that have gone into an uncertain zone. So, that is why it is very tough to predict the likely value of the stock price. So maybe some people who buy now might end up making good money or maybe who is buying now might lose half their money, it is impossible to predict at this stage,” market advisor Sandip Sabharwal said.

(Data: Ritesh Presswala)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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