Paytm stock falls 12% brokerage lowers target price
The RBI prohibits Paytm Payments Bank from accepting new customers.
Following the RBI’s action, brokerage ICICI Securities reduced the company’s target price to Rs 1,285 per unit, down from Rs 1,352 previously.
In another setback for Paytm, shares of its parent company. One 97 Communications Ltd, fell nearly 12% on Monday, reaching an all-time low of Rs 672.10 per share. Shares fell on Monday after the Reserve Bank of India prohibited Paytm Payments Bank Ltd from accepting new customers. The NSE opened at Rs 675 per share, down 12.9 percent from the previous close. While the BSE opened at Rs 684, down 11.7 percent from Friday’s close.
Following the RBI’s action, brokerage ICICI Securities reduced the company’s target price to Rs 1,285 per unit, down from Rs 1,352 previously.
Paytm shares traded at Rs 682.05 per share on the BSE index at 9:52 a.m., down 11.9 percent.
According to ICICI Securities, the RBI’s embargo will harm Paytm’s ability to sign up users for new PPBL wallets, savings, or current accounts. “Now, anticipating a slowdown in new user onboarding and a negative impact on incremental payment revenue. As wallets are a key monetizable payment instrument), we revise our target price to Rs1,285” (earlier Rs1,352. It may also postpone PPBL’s plan to apply for conversion into a small finance bank (though it is eligible to apply beginning on May 22).
ICICI Securities also stated that recent embargoes on a leading bank indicate. That lifting restrictions may take time, ostensibly referring to RBI restrictions on HDFC Bank Limited. Following various outages experienced by the private lender. The RBI directed HDFC Bank to temporarily halt all digital launches and new credit card customer sourcing in December 2020. However, after 15 months, the restrictions were finally lifted on Saturday.
Last 7 days, the Reserve Bank of India (RBI) directed Paytm Payments Bank (PPBL) to halt new customer onboarding immediately. Citing “certain material supervisory concerns. It also requested that PPBL, owned by One 97 Communications and Paytm founder Vijay Shekhar Sharma, conduct IT audits.
