Paytm Shares: Big Investors Exit, Retail Flees, Yet Brokerages Bullish. Why?

• Mutual funds reduced their stake in Paytm (One97 Communications Ltd.) for the first time in the October-December quarter, dropping to 14.34% from 16.25%.
• Major mutual funds like Motilal Oswal, Nippon India, and Mirae Asset reduced holdings, while Bandhan Mutual Fund's name disappeared.
• Retail investors have also been continuously selling Paytm shares for seven consecutive quarters, reaching their lowest stake since September 2023.
• Despite investor exits, brokerage houses like Goldman Sachs, Jefferies, Yes Securities, MK, Ventura, and Axis Capital maintain 'Buy' or 'Add' ratings.
• Brokerages cite improving regulatory environment, strong revenue growth, new opportunities in fintech, and operational improvements as reasons for their bullish outlook, with target prices up to Rs 1,600.

Why It Matters: Despite large and small investors exiting, brokerage houses remain bullish on Paytm due to improving fundamentals.