Paytm Shares Rise Amidst Value Buying After Previous Dip

Paytm Shares Rise Amidst Value Buying After Previous Dip

VoM News Desk | December 8, 2023 | 11:28 AM IST | Breaking News | Follow on Google News

Paytm Shares Rise Amidst Value Buying After Previous Dip Image Courtesy: Reuters

Paytm Shares Rise Amidst Value Buying After Previous Dip

One97 Communications, the parent company of Paytm, witnessed a 2.5% rise in its shares on Friday, attributed to value buying and strong volumes. This followed a nearly 19% fall in the previous session, prompted by multiple downgrades after Paytm announced plans to reduce small-ticket loans in response to regulatory changes.

The strategic decision to scale back small-ticket ‘postpaid’ loans is a proactive response to the Reserve Bank of India’s recent tightening of regulations, particularly on unsecured loans.

The affected segment, constituting approximately 55% of quarterly disbursements, had seen rapid year-on-year growth. Paytm aims to achieve a significant reduction of 40-50% in the small-ticket ‘postpaid’ loan category.

Analysts suggest this shift will impact Paytm’s overall loan originations, with brokerage firms adjusting target prices.

Goldman Sachs downgraded the stock to ‘neutral,’ while Jefferies maintained a ‘buy’ rating with an adjusted target price, and Bernstein also lowered its target price.

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