New Delhi, Feb 1 (IANS) Paytm shares plunged 20 per cent at the lower circuit on Thursday after RBI imposed severe restrictions on Paytm Payments Bank.
Paytm is trading at Rs 608.80 down 20.00 per cent on BSE.
Motilal Oswal Financial Services said in a report that the business outlook is highly uncertain and downgraded the stock to neutral.
Paytm Payments Bank Ltd (PPBL) is an associate company of PAYTM and has over 100m KYC customers. It also has 300m wallet users, 30m bank account holders and 17 per cent market share in FASTag by value.
Earlier, RBI in its previous press release dated 11th March directed PPBL to stop onboarding new customers. The regulator has now adopted a stricter stance, citing continued non-compliance and persistent material supervisory concerns.
Accordingly, the RBI on January 31, 2024 imposed stricter measures, thereby significantly limiting the scope of business activities for PPBL.
Paytm has recently announced its plan to downsize its BNPL operations and was working to mitigate the impact by scaling up higher-ticket Personal and Merchant loans. Against this backdrop, the latest measures raise serious concerns over its business outlook and dent overall investor confidence, the report said.
“We, thus, remain watchful of PAYTM’s business model and its ability to navigate through this highly uncertain regulatory and macro environment. We are awaiting clarity from the company on the business outlook, we downgrade our rating to Neutral with revised TP of Rs 575,” the report said.