{"id":16832,"date":"2024-02-02T16:45:19","date_gmt":"2024-02-02T11:15:19","guid":{"rendered":"https:\/\/univest.in\/blogs\/?p=16832"},"modified":"2024-02-02T16:47:29","modified_gmt":"2024-02-02T11:17:29","slug":"paytm-shares-plunges-to-hit-lower-circuit","status":"publish","type":"post","link":"https:\/\/univest.in\/blogs-2\/paytm-shares-plunges-to-hit-lower-circuit\/","title":{"rendered":"Paytm Stock Plunges 40% in Two Days as RBI Cracks Down on Lending Business"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/univest.in\/blogs-2\/paytm-shares-plunges-to-hit-lower-circuit\/#Paytms_stock_witnessed_a_significant_decline_as_it_hit_a_20_lower_circuit_for_the_second_consecutive_day_This_comes_as_a_result_of_the_Reserve_Bank_of_India_imposing_restrictions_on_Paytms_lending_business_following_a_similar_ban_in_March_2022\" title=\"Paytm&#8217;s stock witnessed a significant decline as it hit a 20% lower circuit for the second consecutive day. This comes as a result of the Reserve Bank of India imposing restrictions on Paytm&#8217;s lending business, following a similar ban in March 2022.\">Paytm&#8217;s stock witnessed a significant decline as it hit a 20% lower circuit for the second consecutive day. This comes as a result of the Reserve Bank of India imposing restrictions on Paytm&#8217;s lending business, following a similar ban in March 2022.<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/univest.in\/blogs-2\/paytm-shares-plunges-to-hit-lower-circuit\/#What_is_the_response_of_Paytm\" title=\"What is the response of Paytm?\">What is the response of Paytm?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/univest.in\/blogs-2\/paytm-shares-plunges-to-hit-lower-circuit\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h4><span class=\"ez-toc-section\" id=\"Paytms_stock_witnessed_a_significant_decline_as_it_hit_a_20_lower_circuit_for_the_second_consecutive_day_This_comes_as_a_result_of_the_Reserve_Bank_of_India_imposing_restrictions_on_Paytms_lending_business_following_a_similar_ban_in_March_2022\"><\/span>Paytm&#8217;s stock witnessed a significant decline as it hit a 20% lower circuit for the second consecutive day. This comes as a result of the <a href=\"https:\/\/univest.in\/blogs\/banking-stocks-climb-after-rbi-holds-rates\/\">Reserve Bank of India<\/a> imposing restrictions on Paytm&#8217;s lending business, following a similar ban in March 2022.<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>These regulatory actions from the RBI have raised concerns about <em><strong>Paytm&#8217;s compliance and governance practices<\/strong><\/em><strong>,<\/strong> and have caused a stir in the market. Investors are worried about the potential long-term impact of these restrictions on the company&#8217;s overall performance and profitability.<\/p>\n<p>The RBI restrictions have stopped it from accepting <em><strong>new deposits and carrying out credit transactions<\/strong><\/em> after February 29th, which has effectively shut down its lending operations.<\/p>\n<p>This has caused the <strong><a href=\"https:\/\/univest.in\/stocks\/paytm\/one97-communications-ltd-share-price-today\">Paytm&#8217;s stock price<\/a> <\/strong>to plunge by 40% in just two days, with brokerages downgrading it and slashing target prices. For instance, <strong>Jefferies downgraded Paytm <\/strong>to &#8220;underperform&#8221; with a target of Rs 500 (from Rs 1,050), while Macquarie maintained a &#8220;neutral&#8221; rating but cut to Rs 650.<\/p>\n<p><strong>Analysts view<\/strong> this development as negative, adding to regulatory pressure and potentially impacting earnings by 5-15%. The breakeven target of FY25 appears uncertain, which is causing concerns among investors.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_is_the_response_of_Paytm\"><\/span><strong>What is the response of Paytm?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Paytm has responded by <em><strong>pausing its lending operations and is in talks with banks for partnerships.<\/strong><\/em> They estimate a worst-case impact of Rs 300-500 crore on annual EBITDA.<\/p>\n<p>However, concerns remain regarding near-term solutions, as analysts see no quick fix, with <a href=\"https:\/\/en.wikipedia.org\/wiki\/Reserve_Bank_of_India\" rel=\"nofollow noopener\" target=\"_blank\">RBI<\/a> findings suggesting material lapses. Furthermore, the company faces continued regulatory scrutiny, casting a shadow on its future.<\/p>\n<p><em>Achieving profitability by FY25 seems challenging, given the earnings impact and operational disruptions.<\/em><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Paytm&#8217;s future appears to be hanging in the balance as it struggles to deal with the consequences of the RBI&#8217;s recent actions, which have caused both financial and reputational harm to the company.<\/p>\n<p><em>The situation is being closely watched by investors, who are eagerly waiting to see how the company will handle this difficult phase and regain the trust of its stakeholders.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Paytm&#8217;s stock witnessed a significant decline as it hit a 20% lower circuit for the second consecutive day. This comes as a result of the Reserve Bank of India imposing restrictions on Paytm&#8217;s lending business, following a similar ban in March 2022. These regulatory actions from the RBI have raised concerns about Paytm&#8217;s compliance and<\/p>\n","protected":false},"author":15,"featured_media":26918,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[842],"tags":[],"class_list":["post-16832","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"metadata":{"_last_editor_used_jetpack":["classic-editor"],"_edit_lock":["1706872507:13"],"_edit_last":["13"],"_thumbnail_id":["26918"],"rank_math_internal_links_processed":["1"],"rank_math_primary_category":["842"],"post_views_count":["691"],"rank_math_seo_score":["79"],"rank_math_focus_keyword":["Paytm"],"rank_math_title":["Paytm Shares Plunge 20% Post RBI Restriction "],"rank_math_description":[" Paytm share price hit its 20% lower circuit for the second consecutive session on Friday after RBI restrictions on it's lending business."],"rank_math_analytic_object_id":["496"],"_wp_old_slug":["paytm-stock-plunges-to-hit-lower-circuit"],"rank_math_facebook_title":["Paytm Shares Plunge 20% Post RBI Restriction "],"rank_math_facebook_description":[" Paytm share price hit its 20% lower circuit for the second consecutive session on Friday after RBI restrictions on it's lending business."]},"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/univest-blog.storage.googleapis.com\/blogs\/wp-content\/uploads\/2024\/10\/18181943\/portfolio-6-2.jpg","_links":{"self":[{"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/posts\/16832","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/comments?post=16832"}],"version-history":[{"count":1,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/posts\/16832\/revisions"}],"predecessor-version":[{"id":16838,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/posts\/16832\/revisions\/16838"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/media\/26918"}],"wp:attachment":[{"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/media?parent=16832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/categories?post=16832"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/univest.in\/blogs-2\/wp-json\/wp\/v2\/tags?post=16832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}