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Paytm Faces Ongoing Stock Slide as RBI Ban Impact Deepens

  • Paytm shares hit lower circuit of 20 percent for the second consecutive day

Paytm shares opened with a decline for the second consecutive day. After falling by 20 per cent on Thursday, Paytm shares opened in 20 per cent lower circuit on Friday. The stock is now at Rs 487, close to its all-time low of Rs 438, which it had hit in March 2022. Paytm founder Vijay Shekhar Sharma has called the action of Reserve Bank of India on Paytm Payments Bank as a speed bump. Further said that with the partnership with other banks, the company will keep an eye on it in the next few days or quarters.

The Reserve Bank of India (RBI) banned Paytm Payments Bank on January 31. This action has been taken following a system audit report and subsequent compliance verification report from external auditors.

Brokerage companies downgraded the rating

Jefferies became the first brokerage to downgrade Paytm following the recent developments. After this there have been more downgrades from analysts. JPMorgan has downgraded the stock to Underweight amid risks to the profit pool and competitive advantage and rising adverse regulatory risks. The brokerage has also reduced its price target on the stock to Rs 600 from earlier Rs 900. CLSA has also reduced its price target on Paytm to Rs 750 from earlier Rs 960. However, it has maintained its buy recommendation on the stock.

It has cut Paytm’s EBITDA pre-ESOP estimates by 18 per cent and 22 per cent for fiscal 2026 and 2027 and cut its GMV growth forecast by 8 per cent.

JM Financial also reduced rating

JM Financial and Axis Capital have also reduced the rating of Paytm. In fact, Axis Capital now has the lowest target for Paytm at Rs 450, which is close to its all-time low. It has reduced its rating from Add to Sell. JM Financial has also reduced its target on Paytm to Rs 590 from earlier Rs 1,120 and reduced its rating from Buy to Sell. Of the 15 analysts covering Paytm, four now have a sell rating, while seven have maintained a buy recommendation.

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