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Macquarie’s 12-month bull and bear price target projections for Paytm.Image Credits:Macquarie
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Macquarie dramatically cut its 12 - month price target on One97 Communications , the parent company of digital defrayment stiff Paytm , citing risk of exposure of customers leaving the chopine in the wake ofheightened regulatory scrutiny . Macquarie , which famously presage the slump at Paytm before the list , get down its target to 275 rupee ( down 57.7 % from its premature target of 650 rupees ) , the most brutal by any major brokerage firm firm .
Paytm , which dropped more than 6 % Tuesday morning to 395 rupees ( $ 4.76 ) , is reeling fromthe Amerind central bank ’s clampdown . The Reserve Bank of India ( RBI ) of late last calendar month order Paytm to all but keep out down mental process at Paytm Payments Bank , an associate of Paytm that process all its transactions .
The psychoanalyst squad , led by Suresh Ganapathy , wrote in a note Tuesday that it believes Paytm will see a needlelike decrease in tax revenue and the regulatory crackdown posture a “ serious risk of hegira of customers . ”
A price target of 275 rupees would value Paytm at around $ 2.1 billion , a steep plunge from its peak market capitalisation of nearly $ 20 billion in former 2021 . Paytm had $ 1.072 billion John Cash residuum at the end of December .
“ We cut tax income sharply as we reduce both payments and dispersion business gross ( 60–65 % over FY25/26E ) . Moving payment camber client to another bank account or moving related merchant account to other camber accounts will require KYC ( know your customer ) to be done again based on our television channel check with spouse , indicating that migration within RBI ’s Feb 29th deadline will be an arduous chore . ”
Paytm — which makes most of its money through loaning — is also likely to face challenges retaining its loaning partner , Macquarie added . Paytm does n’t have the licence to operate as a non - banking fiscal troupe ( NBFC ) , and acts as a allocator in connecting lending partner with borrowers .
“ Our communication channel check with some lending partners reveal that they are re - looking at their kinship with Paytm , which eventually could moderate to a declivity in lending business concern revenues in case better half scale down or terminate their family relationship with Paytm . AB Capital , one of Paytm ’s magnanimous loaning partners , has already pared down their BNPL exposure to Paytm from a peak level of Rs20bn to Rs6bn presently and is expected to go down further in our opinion . ”
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India ’s key bank last week said it contract supervisory actions and enforce business restrictions only after “ persistent non - abidance ” with rules , its first comment after a clampdown on Paytm last hebdomad has posture experiential questions about the hereafter of the leading financial services firm .
Shaktikanta Das , the Reserve Bank of India regulator , said the cardinal bank always prosecute with regulated entity bilaterally and nudges them to take corrective action mechanism . If the central bank takes actions , “ it is always symmetrical to the gravity of the position , ” said Das in a media briefing . “ All our actions , being a responsible for regulator , are in the better interest of systemic stability and protection of depositor ’ or client ’ interestingness , ” he added .
