Shares of One97 Communications, the parent company of Paytm Payments Bank (PPBL), fell 20 percent today. The Reserve Bank of India had imposed strict restrictions on the company yesterday. This led to a decline in the stock due to fears of a blow to profitability and customer confidence.
The central bank has directed the digital payments giant to stop accepting deposits i.e. stop top-up of customers’ accounts, wallets etc. citing continued laxity in compliance and monitoring concerns.
The company’s shares touched the lower circuit of 20 percent within the initial minutes of the session and closed at Rs 609. Many analysts have downgraded the stock considering the adverse impact of the RBI order.
Motilal Oswal’s note said that we are keeping an eye on Paytm’s business model and its ability to move forward in such an uncertain regulatory and economic environment. We are awaiting clarity from the company on the business outlook. We are downgrading our rating to neutral and have revised the target price to Rs 575.
