Paytm IPO was launched in November 2021 and made a record by becoming India’s largest IPO (surpassing Coal India). Paytm raised Rs. 18,300 Cr through the IPO out of which Rs. 10,000 Cr was an Offer for sale and the remaining was a fresh issue of Rs. 8300 Cr.
Though Paytm had priced its shares in a price band of Rs 2,080 to 2,150 per unit, it had been nosediving since its listing on November 18, 2021.
Paytm stock has finally started rising again from Rs. 510 of its all-time low in May 2022.
With JPMorgan backing Paytm’s path to a profitable future, pointing out the reduction in Adjusted EBITDA loss with better cost controls has made individual investors look optimistic about the e-commerce stock.
You need demat and trading accounts to buy Paytm shares.
Let’s discuss the step-by-step process of how to buy Paytm shares or any other equity shares.
– Paytm (One97 Communications) is the most prominent digital payment company in India.
– Paytm made a record to becoming India’s largest IPO launched ever. Since its IPO in 2021, the company’s shares reached all-time highs in November 2021
– But they plunged greatly in December 2021, when the investor’s 1-month lock-in period was over.
– Before deciding to buy Paytm shares, research the company’s business fundamentals, follow experts’ views and consider market trends.
How to Buy Paytm Shares
#1. Select Broker that Suits Your Requirements
Full-service broker – If you are a newbie who wants handholding into the stock investment with regular stock advice from your broker, then go with a full-service broker like Axis Direct or Motilal Oswal. But full-service brokers charge heavy brokerage fees which are on the flip side.
Discount broker – A discount broker allows you to pay a nominal flat brokerage fee and provide you with a pure execution platform for trading. You have to do your own research before investing because most discount brokers don’t provide portfolio management services.
#2. Open the Demat+Trading Account
If you want to buy Paytm shares or any other stock, you need to open a demat-cum-trading account for buying and holding the stocks. Most Indian brokers open combined demat and trading accounts, so you needn’t worry about opening both accounts separately.
Once you have decided on the broker in the previous step, open your demat/trading account online.
#3. Deposit Funds
Once your trading account is opened, you can deposit funds easily by using UPI or Bank transfer.
You can follow the steps below to deposit money in your trading account –
- Go to the Funds Section in the trading platform.
- Click on “Add funds”.
- Select the transfer option – UPI or Net banking
- Click on “Continue”.
#4. Finalize Your Investment Strategy
You can invest in two ways –
- Lumpsum investment – Make a single purchase by buying Paytm shares all at once
- SIP – Buy the same amount of shares at regular intervals without worrying about the stock price at that time. This is called SIP or Systematic Investment Plan.
I prefer SIP because it helps you get the benefit of Rupee Cost Averaging (RCA). RCA reduces your risk of market volatility and saves you money on the per-share cost over time.
Because in this process, you invest a fixed amount at regular intervals irrespective of whether the markets are rising or falling. RCA ensures that you buy more units when the markets are down and lesser units when they are rising.
Trading platforms like Zerodha allow you to set a SIP schedule that helps you buy the stocks at regular intervals automatically. You just have to keep the required money deposited in the account.
You can read the complete Zerodha review here for a better understanding. Once you have finalized your strategy, you can place your order.
#5. Place Order
You can buy shares of Paytm stock at the current price by selecting the ‘Market’ option in the order window or you can use more advanced ways like limit orders or stop orders.
The limit-stop orders will only buy Paytm shares once the stock price falls below a certain threshold.
Paytm a short abbreviation for “Pay Through Mobile” is India’s largest digital ecosystem in the finance sector that covers digital payment systems, and e-commerce.
Paytm (parent company One97 Communications) has revolutionized the digital payment system in India and its popular slogan ‘’Paytm Karo’’ slogan has become a verb used for digital payments across India.
The startup is the largest payments platform in India with a gross market value of Rs. 4,033 B in FY 2021. Paytm also contributes to 13% of overall UPI payments done across India.
Review Paytm’s Potential
Paytm stock is currently trading at Rs. 720 per share which is around 60% lower price than its all-time highs.
This lower price trend may entice you to buy the stock at cheap rates. But it’s better to do your research analysis about the company’s financials, performance and future perspective before investing in Paytm shares or any other stock.
Let’s have a quick look at Paytm’s fundamental data provided in the table below –
|Market Cap||Rs. 47,796 Cr.|
|Price-to-Earnings (P/E) Ratio||0|
|Revenue (Q1 FY 2022-23)||Rs. 1,680 Cr (89% growth)|
|Earnings Per Share (Q1 FY 2022-23)||Rs. -9.93|
|52-Week Range (High-Low)||1,955 – 510|
|Debt||Rs. 204 Cr.|
The best way to get started is through a company’s annual and quarterly reports. All publicly listed companies like Paytm have to publicize financial and business operations information on their IR (investor relations) portal.
Third-party platforms like Moneycontrol, ETMoney, or Screener also provide a comprehensive analysis of the listed stocks.
You can also go through the expert’s analysis to get further clarity. You can follow value investing experts like Pranjal Kamra, and CA Rachna Ranade.
When you consolidate financial data with expert analysis, you may decide how much money you should put into Paytm.
Paytm is not the only stock that faced headwinds but Zomato, Nykaa and similar tech stocks also faced heavy sell-offs during 2022.
Since international analysts like JPMorgan seems bullish on Paytm’s future performance, and company management is controlling expenses, the stock may perform better in the upcoming days.
Use your due diligence to make a final call and take a long-term investment horizon to avoid the risk of short-term market fluctuations.
Frequently Asked Questions
No Paytm doesn’t work outside India but you can receive international payments on your Paytm account at present forex exchange rates.
You can call the 24X7 Paytm helpline at 0120-4456-456 for your concerns.
Paytm Postpaid is an instant credit feature that offers you a credit line based on your CIBIL score. You can use the money instantly from Paytm postpaid if you are running out of cash and don’t even have money in your Paytm wallet.
70% of the revenue Paytm earns from different services like Payment gateway, Paytm Wallet, Sound Box, QR Code Scanners and Smart POS.
You have to link a bank account with the Paytm app to perform UPI money transfers.