Paytm shares tumble to 52-week low, down 65% from highs
Paytm's stock dropped over 9% again in early trading today, falling below Rs. 350 mark as troubles persist for parent company One97 Communications. The share price has nosedived 65.5% from its 52-week high of Rs. 998.3 in October 2023. The majority of losses have occurred since the Reserve Bank of India (RBI) imposed restrictions on Paytm Payments Bank on January 31.
Paytm stocks down over 50% since RBI curbs
Following RBI's curbs on Paytm Payments Bank due to persistent non-compliance, Paytm stocks have declined by more than 53%. The regulator found significant irregularities in KYC procedures, putting customers, depositors, and wallet holders at serious risk. The RBI investigation revealed that in many cases, the same PAN was linked to over a hundred if not thousands of customers, and these accounts had hefty balances, raising suspicions about money laundering.
Brokerages cut target prices by 20-60%
In response to RBI's actions, international brokerages such as CLSA, Morgan Stanley, Jefferies, and Bernstein have slashed their target prices for Paytm by 20%-60%. Macquarie has downgraded Paytm to 'underperform' and lowered its target price to Rs. 275 from Rs. 650. The downgrade comes exactly one year after Macquarie 'double-upgraded' Paytm stocks from 'underperform' to 'outperform.'
How Paytm is responding to the crisis
For now, Paytm is scrambling to partner with other banks to find a substitute for the banned Paytm Payments Bank. This comes after RBI Governor Shaktikanta Das said on Monday that the central bank won't review Paytm's ban. "Let me be very clear that there is no review of the action taken against Paytm Payments Bank. The FAQ will deal with customer interest issues," said Das. Axis Bank is keen to work with Paytm subject to prior approval by RBI.
