In a significant development, Paytm witnessed a 20 percent decline in its shares for the second consecutive day on February 2. This downturn is a direct result of the Reserve Bank of India’s stringent measures against Paytm’s lending business, including restrictions on new deposits and credit transactions post-February 29.
Concerns escalated among brokerages following the RBI directive, leading to a notable reduction in target prices for Paytm stocks. Jefferies, for instance, downgraded Paytm from ‘buy’ to ‘underperform,’ slashing the target price by more than half, plummeting from Rs 1,050 to Rs 500 per share. Jefferies highlighted the potential impact on Paytm’s lending business if partners curtail operations due to operational or governance issues.
Macquarie also adjusted its stance on Paytm, maintaining a ‘neutral’ position while reducing the target price to Rs 650 per share. The brokerage firm remains skeptical about an imminent resolution to Paytm’s issues, considering the lapses identified by the RBI as significant. As the situation unfolds, market participants closely monitor Paytm’s response and potential strategies to address the challenges posed by the regulatory intervention.
