Why is Paytm Down Today? What Happened to Paytm Today?
by Alaguvelan M
Updated Dec 07, 2023
Why is Paytm Down Today?
On Thursday, Paytm witnessed a significant drop in its stock value, hitting the 20% lower circuit limit on the BSE. This decline raised concerns over Paytm's shift away from small-ticket Buy Now, Pay Later (BNPL) loans, constituting over 50% of total disbursements.
The company, in consultation with lending partners, revealed plans to scale down monthly disbursements in its small-ticket 'postpaid' loan product by 40-50%. The decision was influenced by recent regulatory actions by the RBI. Paytm aims to focus more on high-ticket personal loan disbursements. Analysts anticipate a negative market response until the new strategy unfolds, leading to revised projections and target prices by financial experts.
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What Happened to Paytm Today?
On December 6, 2023, Paytm faced a notable day in the stock market. The company's stock closed at ₹813.3 per share, showing a 3.12% decline from the previous day. Despite a strong overall performance in 2023, concerns about Paytm's shift away from small-ticket loans triggered a 20% drop, hitting the lower circuit limit at ₹650.65 on the BSE.
This decision, influenced by regulatory actions and accounting for more than half of quarterly disbursements, raised questions among analysts. JM Financial revised their target price to ₹1,120, anticipating a negative market reaction until Paytm's new strategy unfolds. Meanwhile, Motilal Oswal Securities maintains a 'Buy' call on Paytm shares with a target price of ₹1,025.
Why is Paytm Down Today - FAQs
Paytm's stock witnessed a notable drop due to concerns over its shift away from small-ticket size BNPL loans, impacting overall loan originations.
Paytm, in consultation with lending partners, decided to scale down monthly disbursements in its small-ticket 'postpaid' loan product, citing recent regulatory actions by the RBI.
Paytm shares hit the 20% lower circuit, causing apprehensions among investors and leading to a downward trend in the stock price.
Regulatory actions, particularly the RBI's increase in risk weights for unsecured retail loans, influenced Paytm's move to adjust its loan product strategy.
Paytm revealed an increased focus on high-ticket personal loan disbursements as a countermeasure to the scaling down of small-ticket 'postpaid' loans.