Paytm Shares Hit New Record Low To Touch INR 342.4 Amid Regulatory Crisis

With hardly any respite for fintech major Paytm, its shares hit a fresh record low at INR 342.4 on the BSE during the early trading hours on Wednesday (February 14), slumping almost 10% once again.

The company’s shares nosedived 10% to touch the lower circuit and hit an all-time low at INR 380.35 on Tuesday after a downgrade and sharp price target (PT) cut from brokerage Macquarie amid the ongoing regulatory turmoil in Paytm Payments Bank.

Macquarie downgraded the stock to ‘underperform’ from an earlier ‘neutral’ rating and lowered the PT to INR 275 from INR 650, which implies a downside of 27.7% to the stock’s last close.

“Post the recent regulatory changes and diktats, Paytm now faces a serious risk of exodus of customers (overall 330 Mn customers and 110 Mn MTUs – monthly transacting users and merchant subscription network of 10.6 Mn) which significantly jeopardises its monetisation as well as its business model,” said the brokerage in its research note.

It is pertinent to note that it’s now exactly two weeks since RBI’s clampdown on Paytm Payments Bank. On January 31, the RBI barred the company from any deposits or credit transactions, or top-ups in any of its customer accounts. The central bank also barred Paytm Payments Bank from processing other banking services such as UPI facilities and funds transfer from February 29, 2024.

Since then, multiple developments have taken place where Paytm’s CEO and founder Vijay Shekhar Sharma also met the central bank officials and finance minister Nirmala Sitharaman.

However, RBI governor Shaktikanta Das said earlier this week that there was “hardly any room” to review the action on the payments bank.

Meanwhile, over the last two weeks, Paytm shares have declined over 50%. The company’s shares remain extremely volatile. Reviving slightly, Paytm shares were trading 9.5% lower at INR 344.1 on the BSE by 10.20 AM IST today.

The company’s market cap stands at $2.6 Cr.

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