Paytm Shares Touch 52-Week Low After Macquarie Cuts Target Price

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Shares of Paytm declined nearly 9% to touch a 52-week low at INR 385.75 during Tuesday’s trading session

This comes soon after foreign broking firm Macquarie downgraded One97 Communications to ‘underperform’ and sharply cut the target price to INR 275 from INR 650

Meanwhile, the central bank’s governor Shaktikanta Das on Monday said there is “hardly any room” to review the action on the payments bank

Shares of fintech giant Paytm declined nearly 9% to hit 52-week low at INR 385.75 during Tuesday’s (February 13) trading session on the BSE.

This comes soon after brokerage firm Macquarie downgraded One97 Communications’ stock ratings to ‘underperform’ and lowered its target price to INR 275 from INR 650.

“We downgrade Paytm to Underperform and sharply cut TP to INR 275 from INR 650 driven by a sharp reduction in revenues across various segments,” Macquarie analyst Suresh Ganapathy said in a note.

On Monday, Paytm shares ended at INR 422.60 apiece, while it opened at more than 6% lower at INR 400.1 on Tuesday. At 10:45 PM, Paytm shares were trading at INR 391.55 apiece.

Due to recent regulatory changes and mandates, Paytm is at risk of losing a large number of customers, including its monthly transacting users and merchant subscription network, Ganapathy added. This threatens its ability to generate revenue and sustain its business model.

“Our channel checks with some lending partners reveal that they are re-looking at their relationship with PayTM which eventually could lead to a decline in lending business revenues in case partners scale down or terminate their relationship with Paytm,” the analyst said.

The crisis started for the fintech major after RBI on January 31 barred Paytm Payments Bank from taking deposits, credits, or processing top-up transactions in its customer accounts for ‘persistent non-compliances’. The bank has also been barred from processing other banking services like UPI facilities and funds transfer from February 29, 2024.

Meanwhile, the central bank’s governor Shaktikanta Das on Monday said there is “hardly any room” to review the action on the payments bank.

“The decisions taken by the Reserve Bank are after due thought process…be it a bank, payment bank or cooperative bank. If we are taking action against somebody, not specifically talking about Paytm, but in general, we interact for months and years…There is hardly any room for review,” he said.

Das said the central bank provided Paytm Payments Bank one-month’s time so that customers are not inconvenienced.




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Paytm Shares Touch 52-Week Low After Macquarie Cuts Target Price

SUMMARY

Shares of Paytm declined nearly 9% to touch a 52-week low at INR 385.75 during Tuesday’s trading session

This comes soon after foreign broking firm Macquarie downgraded One97 Communications to ‘underperform’ and sharply cut the target price to INR 275 from INR 650

Meanwhile, the central bank’s governor Shaktikanta Das on Monday said there is “hardly any room” to review the action on the payments bank

Shares of fintech giant Paytm declined nearly 9% to hit 52-week low at INR 385.75 during Tuesday’s (February 13) trading session on the BSE.

This comes soon after brokerage firm Macquarie downgraded One97 Communications’ stock ratings to ‘underperform’ and lowered its target price to INR 275 from INR 650.

“We downgrade Paytm to Underperform and sharply cut TP to INR 275 from INR 650 driven by a sharp reduction in revenues across various segments,” Macquarie analyst Suresh Ganapathy said in a note.

On Monday, Paytm shares ended at INR 422.60 apiece, while it opened at more than 6% lower at INR 400.1 on Tuesday. At 10:45 PM, Paytm shares were trading at INR 391.55 apiece.

Due to recent regulatory changes and mandates, Paytm is at risk of losing a large number of customers, including its monthly transacting users and merchant subscription network, Ganapathy added. This threatens its ability to generate revenue and sustain its business model.

“Our channel checks with some lending partners reveal that they are re-looking at their relationship with PayTM which eventually could lead to a decline in lending business revenues in case partners scale down or terminate their relationship with Paytm,” the analyst said.

The crisis started for the fintech major after RBI on January 31 barred Paytm Payments Bank from taking deposits, credits, or processing top-up transactions in its customer accounts for ‘persistent non-compliances’. The bank has also been barred from processing other banking services like UPI facilities and funds transfer from February 29, 2024.

Meanwhile, the central bank’s governor Shaktikanta Das on Monday said there is “hardly any room” to review the action on the payments bank.

“The decisions taken by the Reserve Bank are after due thought process…be it a bank, payment bank or cooperative bank. If we are taking action against somebody, not specifically talking about Paytm, but in general, we interact for months and years…There is hardly any room for review,” he said.

Das said the central bank provided Paytm Payments Bank one-month’s time so that customers are not inconvenienced.




Source link

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

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