Paytm shares dropped 20% on December 7 after announcing plans to issue fewer personal loans under Rs. 50,000 due to tightened RBI regulations.
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Focusing on high-value loans
Paytm now plans to focus on offering higher-value personal and commercial loans to low-risk, creditworthy customers.
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Loan volume decrease expected
Paytm's President, Bhavesh Gupta, expects a 40%-50% decrease in loan volume but minimal impact on revenue growth.
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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.
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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.