Is there any other reason for Paytm falling so sharply other than Suresh Ganapathy?

Let me put it this way. Suresh Ganapathy is an analyst giving his opinion on the stock based on certain parameters. The strange part is that he has been consistently right. He has been calling lower levels for Paytm since its listing and he needs to be given credit for the fact that he has been consistently right. The stock has slumped close to 71% since its November market debut and Suresh Ganapathy of Macquarie has been consistently downgrading it.

In his latest view on Paytm, Suresh Ganapathy has cut the price target for Paytm lower from Rs.700 to Rs.450. His argument is that Fintech companies globally are seeing a compression in value and Paytm business model looks highly vulnerable. In addition, recent developments like the ban on fresh account opening by Paytm Bank and allegations of leakage of account details to Chinese parties have not gone down too well.

Paytm holds the distinction of being the largest public issue till date at Rs.18,300 crore. However, from the time of listing, there were issues like too much cash burn, dubious revenue models, delay in profitability targets and its dependence on POS revenues have worked against the stock. Investors have been concerned that the valuations were just too aggressive in the first place. We have to wait and see how the Paytm story pans out.

The IPO of Paytm was priced at Rs.2,150, so now the stock is more than 70% down from the issue price. That is a lot of price damage to the stock.