Paytm crisis: Macquarie predicts a large consumer exodus and reduces target price by 57% to Rs 275

Paytm crisis: Macquarie predicts a large consumer exodus and reduces target price by 57% to Rs 275

Macquarie predicts that One97 Communications' revenue would drop by 60–65% as a result of decreased payments and distribution income.

One97 Communications' latest closing price of Rs 416 is 33% more than Macquarie's target price.

The foreign brokerage Macquarie has reduced the target price of Paytm (One97 Communications) to Rs 275 from Rs 650 and downgraded the company to a "underperform" rating. The significant danger to Paytm's monetization and business strategy, according to analyst Suresh Ganapathy, is the company's potential loss of users.

The target price is 33% less than the previous closing price of Rs 416 for One97 Communications.

"In light of a 60–65% percent drop in revenues as a result of lower payment and distribution revenues, we have increased the loss estimate by 170%/40% compared to FY25E/26E," Ganapathy said in his report.

The Reserve Bank of India placed limitations on One97 Communications component Paytm Payments Bank Ltd (PPB) the previous month, citing "persistent non-compliance as well as continuing material supervisory concerns at the bank." Because action was warranted, the Reserve Bank of India took these actions, which led to Macquarie's target price reduction. ,

The RBI ordered PPBs to stop accepting deposits, credit transactions, or top-ups after February 29th, with the exception of any interest or cashback in customer accounts, prepaid devices, wallets, Fastag, and NCMC cards. The RBI did not provide specifics on the concerns raised, however. Switch it off. Return of funds. Additionally, it mandated that all pipeline transactions and nodal accounts be settled by March 15 by the payments bank.

With 110 million monthly transactions, Paytm now boasts over 330 million users and consumers

According to our channel checks with partners, "Payments Bank customers transferring for various bank accounts or transferring corresponding merchant accounts to other bank accounts will need to complete KYC (Know Your Customer)." According to Paytm, "what you're transfer within the RBI's February 29 timeframe will be a tough task."