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Macquarie lowers Paytm goal due to ‘serious danger of flight of customers’

One97 Communications, the parent company of digital payments business Paytm, might lose users due to regulatory scrutiny; therefore, Macquarie drastically lowered its 12-month price target. Before the launch, Macquarie notoriously forecast Paytm’s slide, lowering its objective to 275 rupees (57.7% from 650 rupees), the most harsh of any major brokerage company.

Paytm fell more than 6% Tuesday morning to 395 rupees ($4.76) due to the Indian central bank’s crackdown. The Reserve Bank of India forced Paytm to almost shut down Paytm Payments Bank, its subsidiary that handles all its transactions, late last month.


In a report Tuesday, Suresh Ganpathy’s research team predicted a steep drop in Paytm income and a “serious risk of an exodus of customers” from the regulatory crackdown.

A price objective of 275 rupees would value Paytm at $2.1 billion, a sharp drop from its late 2021 top of about $20 billion. December saw Paytm’s cash balance at $1.072 billion.

“We cut payments and distribution revenues by 60–65% over FY25/26E. Based on our channel checks with partners, relocating payment bank customers or merchant accounts to other bank accounts would require KYC (know your customer) again, making migration within RBI’s February 29th deadline difficult.

Macquarie noted that Paytm, which relies on loans, may have trouble keeping its lenders. Paytm connects lending partners with borrowers as a distributor without an NBFC license.


Our channel checks with several lending partners show that they are re-evaluating their partnership with Paytm, which might lower lending business revenues if partners scale down or cancel their relationship. AB Capital, one of Paytm’s main lending partners, has reduced its BNPL exposure to Paytm from Rs 20 billion to Rs 6 billion and is anticipated to reduce it further.

The Indian central bank said it conducts supervisory steps and imposes business limitations only after “persistent non-compliance” with laws. Its first response after a clampdown on Paytm last week raised existential issues about the major financial services firm’s survival.

Reserve Bank of India (RBI) governor Shaktikanta Das stated that the central bank always bilaterally talks with regulated businesses and encourages remedial action. Das told a media conference that central bank interventions are “always proportionate to the gravity of the situation.” “As responsible regulators, all our actions are in the best interest of systemic stability and depositors’ or customers’ interests,” he said. 

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