Rs 26,000 crore lost in 10 days! Paytm Payments Bank ban by RBI leaves Paytm shares gasping

Paytm share price today: Shares of One 97 Communications, the parent company of Paytm, witnessed a notable decline of 9% on Wednesday, plummeting to a low of Rs 344.90 on the Bombay Stock Exchange. This decrease can be attributed to the shift of kirana stores from the ‘Paytm Karo’ campaign and the unwavering stance of the Reserve Bank of India (RBI) regarding Paytm Payments Bank, as mentioned in an ET report.

Over the course of the last 10 trading days following the announcement of the RBI ban, the value of the company’s stock has declined by around 55%, resulting in a market capitalization loss of Rs 26,000 crore.

Macquarie, a global broking firm that has experienced a tumultuous association with Paytm stock, has recently lowered its rating to ‘underperform’ and set a target price as low as Rs 275. Merely twelve months ago, Macquarie had significantly upgraded the stock, assigning it a target price of Rs 800. However, in 2022, the target price was revised to Rs 450, accompanied by an ‘underperform’ rating.

Macquarie’s shift in position can be attributed to their conviction that Paytm is presently engaged in a battle for survival. The implementation of recent regulatory measures has exposed the company to a grave danger of customer attrition, thereby posing a substantial menace to its monetization strategies and overall business framework.

Suresh Ganapathy, an analyst at Macquarie, has recently announced a substantial decrease in revenue forecasts for the payments and distribution sectors. These projections have been reduced by 60-65% for the fiscal years 2025 and 2026. Our investigations with our partners have revealed that transferring payment bank customers to alternative bank accounts or relocating associated merchant accounts to different banks will necessitate the completion of KYC (Know Your Customer) procedures. This suggests that meeting the RBI’s deadline of February 29th for the migration process will pose a significant challenge, according to Ganapathy.

RBI Governor Shaktikanta Das has conveyed that there is a restricted opportunity to reassess the measures implemented against Paytm Payments Bank. Consequently, financial analysts are recommending retail investors to proceed with prudence and refrain from investing in the organization until the regulatory hurdles are resolved.

Vinit Bolinjkar, an analyst at Ventura Securities, highlighted that the Reserve Bank of India (RBI) has been closely observing the operations of the company in recent years. Paytm has consistently been found to be in violation of regulations, leading to significant penalties being imposed on the company. As a result, its entire business model has been severely impacted. Consequently, it is strongly advised to avoid investing in this stock as much as possible, according to Bolinjkar.

According to Macquarie’s findings, lending partners are reconsidering their relationship with Paytm, which could lead to a decline in lending business revenues if partners choose to scale down or terminate their association with the company.