Beleaguered fintech Paytm’s shares faced severe battering after RBI barred its payments bank from onboarding new customers, with prices tanking 40% over two days including consecutive lower circuit hits. Analyst downgrades poured in alongside growth uncertainty with operational curbs threatening business fundamentals.
Paytm warned of ‘a few quarters’ turbulence while asserting compliance measures are underway for addressing RBI’s supervisory concerns urgently. But unconvinced investors continued dumping stakes with stock sliding near its life-time lows breached last March.
Growth Headwinds, Valuation Worries Mount
Critics opined the sweeping payment embargo materially impairs Paytm’s profitability path already under stress, disrupts network effects through reduced scale and dents credibility. Valuation narratives as new-age challengers heavily ride on future potential rather than immediate bottom-lines also face renewed skepticism amidst regulatory troubles.
Downgrades now span top global majors like JP Morgan and Morgan Stanley alongside local brokerages, with stretched price targets shrinking over 25% within days. If curbs sustain for long, Paytm’s consumer banking ambitions also remain inhibited as wallet leadership itself stands threatened by aggressive rivals.
