Dear Reader, Global financial services Group Macquarie dramatically cut its 12-month price target on One97 Communications, the parent of Paytm, citing risks to customers. The stark reduction in Paytm reflects escalating concerns over regulatory pressures and the potential flight of customers from the Indian fintech platform. With a substantial slash to 275 rupees, down 57.7%, Macquarie underscores the gravity of the situation, signaling a significant decline from Paytm’s previous market valuation. India’s central bank’s (RBI) recent directive, essentially halting operations at Paytm Payments Bank, amplifies these challenges. Analyst Suresh Ganpathy’s team foresees a substantial revenue decline and a looming risk of customer exodus. The impending migration of accounts amid the regulatory deadline poses formidable obstacles, further compounded by potential setbacks in retaining lending partners due to regulatory constraints.Meanwhile, a report has emerged that SoftBank Group sold a major chunk of its stake in Paytm just before RBI imposed sanctions that sent the firm’s share price tumbling by over 42% within three days. The Japanese conglomerate trimmed its exposure in Paytm from 18.5% to nearly 5% between November 2021 and January this year. The unfolding scenarios cast a shadow of uncertainty over Paytm’s future trajectory, raising existential questions about the leading financial service provider’s resilience amidst regulatory turbulence and market pressures. Sainul, Editor.
NEWS
Macquarie cuts Paytm target on ‘serious risk of exodus of customers’
Macquarie, which famously predicted the slump at Paytm before the listing, lowered its target to US$3.3, the most brutal by any major brokerage firm; Paytm is reeling from the Indian central bank’s clampdown. SoftBank cut down most of Paytm stake before the crackdown by India’s central bank
SoftBank’s stake in Paytm had gone down from 18.5% in November 2021, when the fintech firm was listed in India, to nearly 5% in January; Paytm has landed in hot water since the Reserve Bank of India froze most of its banking operations on January 31.
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Bitcoin hits US$50K level for first time in more than two years
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