Shares of Paytm have been on a downward trend for quite a while now. The stock is down nearly 72 per cent when compared to an all-time high of Rs 1961 it touched in November last year on the day of its debut.
The shares plunged over 4 per cent to hit an all-time low of Rs 541.15 on BSE. The market cap of the firm fell to Rs 35,915.27 crore.
As an investor, you must be wondering where is the bottom for this stock? Well, experts continue to have a bearish view on the stock amid the recent negative news flow.
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“Paytm stock is in a continuous downtrend on negative sentiments and may touch the levels of 500 – 450 in the near term. Investors must avoid this stock for time being,” Dr. Ravi Singh-Vice President and Head of Research ShareIndia told Business Today.
Global financial major Macquarie slashed its price target for Paytm citing regulatory headwinds including a falling probability of getting a banking licence.
This is the second time that the global brokerage firm has slashed its target for Paytm. It initiated coverage on the stock in November last year with a target price of Rs 1,200, which was cut to Rs 700 last month and now has been further slashed to Rs 450 per share.
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“Recent developments significantly reduce the probability of getting a banking license to lend, in our view,” stated the Macquarie report while highlighting the recent Reserve Bank of India (RBI) action against the fintech firm’s subsidiary, Paytm Payments Bank and the problem of Chinese ownership, which is in excess of 25 per cent.
“RBI’s regulations on digital payments and BNPL (Buy Now Pay Later), and stricter KYC and compliance norms will all be adverse developments for fintech companies in general, potentially bringing down unit economics and/or growth, in our view. We see these as additional headwinds for Paytm, which could cloud its path towards profitability,” the report added.
Recently, Bloomberg, citing a person familiar with the matter, reported that the annual inspection by the central bank had found that Paytm Payments Bank’s servers were sharing information with China-based firms which indirectly own a stake in the bank.
However, Paytm Payments Bank rejected the media report. In a tweet, Paytm Payments Bank called the report “false and sensationalist”.
