Paytm loses money
A global broking firm called Macquarie shared that they have a love-hate relationship with the stock of Paytm. It has downgraded the new-age stock and even underperformed as the targeted price is at its lowest of around Rs.275.
The Kirana stores have taken a break from dancing to the famous jingle of ‘Paytm Kro’. Plus, RBI showed its reluctance to make any changes to its stance on Paytm payments bank. The shares of One 97 Communications tumbled up to 9%. This happened on Wednesday, and it was lowest at Rs. 344.90 on BSE.
In around 10 trading days after the RBI announced its ban, the stock lost around 55% of its total value, or, in other words, around Rs. 26000 crores in market capitalism.
Paytm and its relationship with Macquarie
Macquarie is a global broking firm and it shares its love-hate relationship with Paytm stock. The stocks have downgraded the stock to underperform. The target price is at its lowest which is around Rs.275.
Last year, this global broking firm gave the stick a double upgrade along with a target price of around Rs. 800. However, in 2022, the target price was around Rs. 450, along with an underperform rating.
This is the reason that Macquarie has decided to change its stance again. Vijay Shekhar Sharma, who is leading Macquarie, is fighting for its survival in the market. Due to all the problems, Paytm is facing a risk of customer exodus. This is going to majorly jeopardize its monetization as well as its business model down the line.
‘We cut revenues sharply while reducing payments as well as distribution business revenues, which are 60–65% over the fiscal years 2025 and 26E. Moving the payment bank customers to any other bank account or shifting merchant accounts to any other bank account is going to need Know Your Customer, or KYC, to be done completely. Also, it is based on our company’s channel checks with every partner. This will indicate that migration is within the RBI’s given deadline, which is February 29, and all of it will be a difficult task,’ according to Macquarie analyst Suresh Ganapthy.
According to the governor of the Reserve Bank of India, Shaktikanta Das, the ban imposed on the payment banks of Paytm which also includes Paytm wallet leaves no room to review other actions.
The advice offered by market experts
The market experts advise all retail investors to avoid catching the falling knife. This should be followed till all the regulatory challenges settle down.
Also, RBI is in the process of guiding the company but Paytm has been a constant violator. After the penalties, the complete business model is disrupted. According to Vinit Bolinjkar, they would like to stay away from the stock.
