Brokerage firm Macquarie issued an underperform rating for Paytm (One97 Communications) on Tuesday, significantly lowering the target price to Rs 275, the lowest among all other brokerages, according to media reports.
This move follows Macquarie's prior downgrade of Paytm and reduction of its target price on the day of the company's listing, which had notably impacted the stock price on its debut.
Paytm's shares concluded at Rs 422 on the NSE on Monday, marking a negative return of 40 per cent over the past month following regulatory actions by the Reserve Bank of India (RBI).
In its latest communication, Macquarie expressed concerns regarding the recent regulatory directives, indicating a significant risk of customer attrition for Paytm. This, in turn, poses a substantial threat to the company's monetisation efforts and business model.
Macquarie's note highlighted feedback from lending partners, suggesting a reassessment of their ties with Paytm. This development could potentially lead to a reduction in lending business revenues if partners opt to scale back or terminate their associations with Paytm.
Additionally, during a joint press conference with the Finance Ministry on Monday evening, the RBI governor asserted that there is no leeway to reconsider the deadline or decisions made regarding Paytm. This reaffirmed the stringent stance of regulatory authorities concerning the fintech firm's operations.