Discover the latest twists in the Paytm Stock Prices as shares skyrocket 5% despite RBI hurdles! Dive into the details of this remarkable recovery and find out what experts are saying about the future of this fintech giant. Don’t miss out on the inside scoop – read now!
One 97 Communications Ltd Sees 5% Gain, Sixth Time in Seven Sessions
Shares of One 97 Communications Ltd, the parent company of Paytm, surged by 5 percent on February 26, hitting the upper circuit for the sixth time in the last seven sessions. This upward trend marks a recovery from its recent all-time low of Rs 318.05, which occurred following the Reserve Bank of India’s (RBI) restrictions on its banking arm.
Paytm stock’s closing price on the National Stock Exchange stood at Rs 428.10, reflecting a 4.99 percent increase from the previous day’s close. However, despite this recovery, the company’s market capitalization remains 30 percent lower than on January 31, when the RBI issued a circular regarding Paytm Payments Bank. Compared to the same period last year, the stock has decreased by 33 percent.
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Positive Developments Around RBI’s Actions
The recent surge in Paytm stocks follows some positive developments concerning the RBI’s actions on Paytm Payments Bank. The RBI advised the National Payments Corporation of India (NPCI) to review Paytm’s request to become a third-party application provider (TPAP). Approval of this request would ensure uninterrupted UPI services for Paytm customers. Additionally, the RBI suggested that if NPCI grants TPAP status to One97 Communications, it could facilitate the seamless migration of ‘@paytm’ handles from Paytm Payments Bank to other banks, preventing any disruptions.
Downgrades and Adjustments by Research Houses
Goldman Sachs recently downgraded Paytm stock to “neutral” and reduced the target price from Rs 860 to Rs 450. The adjustment reflects concerns about potential market share loss in the payments sector and anticipates a lending slowdown due to the RBI’s restrictions on the payments bank. Consequently, Goldman Sachs analysts revised down revenue and adjusted EBITDA estimates for FY24E-26 by up to 36 percent and 80 percent, respectively.
Following the RBI’s actions, several brokerages downgraded Paytm shares, with Jefferies even moving it to its list of “non-rated” stocks. However, Bernstein remains bullish on the stock despite the challenges it faces.
In conclusion, while Paytm’s recent share surge indicates a partial recovery from recent lows, the company continues to navigate regulatory challenges and market uncertainties, prompting mixed opinions from analysts and research houses.
Bhaarat Bulletin’s Shikha Rai, Bimal Dev, and BSE/NSE have contributed to the above report
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