BUSINESS

Here's why Paytm shares tanked 20% today

By Rishabh Raj

1

Paytm shares plummet

Paytm shares dropped 20% on December 7 after announcing plans to issue fewer personal loans under Rs. 50,000 due to tightened RBI regulations. 

2

Focusing on high-value loans

Paytm now plans to focus on offering higher-value personal and commercial loans to low-risk, creditworthy customers. 

3

Loan volume decrease expected

Paytm's President, Bhavesh Gupta, expects a 40%-50% decrease in loan volume but minimal impact on revenue growth. 

4

Small loans dominated Q3

During Q2, small loans made up 56% of Paytm's total loans. Financial analyst Rahul Jain estimates that loans under Rs. 50,000 account for about 38% of Paytm's total loans.  

5

Minimal revenue impact predicted

Jain predicts a 15% QoQ negative impact on the total value of loans distributed by Paytm but foresees a much lower revenue impact of around 5% QoQ. 

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