Alina
PAYTM STOCK
Paytm stock continues its recovery, surging by 9% and witnessing a substantial trade of Rs 103 crore, involving around 21 lakh shares. The details of the buyer and seller remain undisclosed. This rise follows a previous session’s gain after enduring a significant drop of about 42% over three consecutive sessions post RBI’s restrictions on its payments bank unit.
One 97 Communications, Paytm’s parent company, traded at Rs 492.25 on the National Stock Exchange, marking a 9.3% increase from the previous close.
The Reserve Bank of India’s imposition of strict curbs on Paytm Payments Bank business triggered a wave of downgrades from brokerages, with Jefferies reducing the target price to Rs 500 and Macquarie to Rs 650. These regulatory actions instigated a crisis management mode within Paytm, amid concerns over potential investigation by the Enforcement Directorate regarding alleged money laundering charges.
Reports suggest that the RBI might consider revoking Paytm’s banking license once depositors’ money is secured, following multiple warnings on the firm’s dealings between its payments app and banking unit.
Bernstein maintains an ‘Outperform’ rating on Paytm stock, viewing it as nearing its ‘doomsday valuations’ and anticipates the company’s ability to navigate operational changes necessitated by the RBI’s restrictions. However, JM Financial forecasts a potential profitability hit of over 10%, downgrading the stock to ‘Sell’ from ‘Buy’ with a target price of Rs 590.
JP Morgan analysts perceive high risks to forward projections due to the regulatory order’s material impact on near-term growth and profitability, emphasizing the need for Paytm to restore credibility in the durability of its business model.
