Paytm to weigh first bonus issue after maiden annual profit
Paytm will consider its first-ever bonus share issue next week, a move that underscores a dramatic turnaround in both its financial performance and domestic investor confidence.
Paytm is set to consider a bonus share issue on July 20 alongside its first-quarter results. The board has not yet disclosed the size of the issue or the record date. If approved, it will be the company's first bonus issue since its 2021 stock market debut.
The proposed distribution marks a sharp pivot for a stock that has historically struggled to reward shareholders. Paytm listed below its issue price of Rs 2,150 per share and later plummeted to a record low of around Rs 300 amid regulatory scrutiny and doubts about its path to profitability. Its last major capital return was an Rs 850 crore open market buyback completed in December 2022.
The potential bonus issue coincides with a significant shift in Paytm's shareholder base toward domestic institutions. By the end of the first quarter of fiscal 2027, domestic investors held 51.6% of the company, up from 50.3% in the prior quarter. This solidified its status as an Indian-Owned and Controlled Company, a threshold it originally crossed in March 2026.
Domestic institutional ownership reached a record 24.9%, up from 23.1%, driven by increased allocations from mutual funds. Mutual fund holdings rose to 17.9%, with the number of funds holding the stock increasing to 43 from 41. Notable buyers included Motilal Oswal Mutual Fund, Bandhan Mutual Fund, Nippon Mutual Fund, Mirae Asset Fund, Kotak Mutual Fund and SBI Life Insurance.
This institutional accumulation follows a concrete improvement in the company's underlying financial performance. In fiscal 2026, Paytm reported its first full-year profit, with profit after tax reaching Rs 552 crore. Revenue grew 22% year-on-year to Rs 8,437 crore, while EBITDA improved by Rs 2,008 crore from the prior year to reach Rs 502 crore.
The improving fundamentals are reshaping how the market values the business. Last month, Goldman Sachs maintained a positive stance on the stock, raising its revenue estimates by 2% and EBITDA estimates by up to 6%. The brokerage cited continued market share gains in payments and robust growth in financial services, noting that Paytm's valuation multiple could re-rate further if revenue growth sustains above 20%.
