Rs 26,000 crore lost in 10 days! Paytm Payments Bank ban by RBI leaves Paytm shares gasping

Feb14,2024



Paytm Share price today: Shares of Paytm parent company One97 Communications saw a huge fall of up to 9% on Wednesday, hitting a low of Rs 344.90 on the Bombay Stock Exchange. This decline is due to the 'Paytm Do' campaign of grocery stores and the Reserve Bank of India (reserve Bank of India) on firm condition Paytm Payments BankAn ET report said.
In the last 10 trading days since the RBI restrictions were announced, the company's share value has fallen by nearly 55%, leading to a market capitalization loss of Rs 26,000 crore.
Global broking firm Macquarie, which has had a volatile relationship with Paytm stock, has downgraded it to 'underperform' with a minimum target price of Rs 275. Exactly a year ago, Macquarie gave the stock a double upgrade with a target price. 800 rupees. In 2022, the target price was revised to Rs 450 with an 'underperform' rating.
Macquarie's change in stance is attributed to his belief that Paytm is currently fighting for survival. Recent regulatory measures have put the company at serious risk of losing customers, which poses a significant threat to its monetization and business model.
Macquarie analyst Suresh Ganapathy said Macquarie has significantly lowered revenue estimates for both the payments and delivery businesses (by 60-65% from FY25/26E). Based on our channel checks with partners, we have found that there is a need to complete KYC (Know Your Customer) processes to transfer payments bank customers to other bank accounts or transfer related merchant accounts to other banks. Will happen. This indicates that meeting the RBI's February 29 deadline for migration will be a challenging task, he said.
Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the scope for review of the action taken against Paytm Payments Bank is limited. As a result, market experts are advising retail investors to exercise caution and avoid investing in the company until the regulatory challenges are resolved.
Vineet Bolinjkar of Ventura Securities said the RBI has been closely monitoring the company's activities in recent years and Paytm has been found to be consistently violating regulations. Due to heavy fine imposed on the company, its entire business model has been disrupted. That said, we therefore recommend staying away from this stock as much as possible.
According to Macquarie's findings, lending partners are reconsidering their relationships with Paytm, which could lead to a decline in revenue from the lending business if partners choose to reduce or end their relationships with the company. Can.



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