February 18, 2024
Paytm Shares Witness Significant Decline After RBI Restrictions
Finance Stock Markets

Paytm Shares Witness Significant Decline After RBI Restrictions

Paytm Shares Witness Significant Decline After RBI Restrictions/Mint

Paytm Shares Witness Significant Decline After RBI Restrictions

Following the Reserve Bank of India’s (RBI) restrictions on Paytm Payments Bank Limited (PPBL), Paytm’s share price experienced substantial selling pressure on February 1. Opening lower at ₹608.80 on BSE, Paytm shares quickly touched a 20% lower circuit within minutes of the market’s opening bell.

RBI Restrictions Impact on Paytm Shares

Experts attribute the selloff pressure to the RBI’s restrictions on PPBL, anticipating an impact on Paytm’s lending business, which contributes about one-fifth of its net revenue. Until Paytm management provides an official statement about the effects of RBI’s restrictions on its business, the stock is expected to remain under pressure.

Analysts’ Insights on Paytm Share Price

Avinash Gorakshkar, Head of Research at Profitmart Securities, noted that the RBI’s restrictions on Paytm Payments Bank are causing a selloff, particularly affecting Paytm’s lending business, which forms a significant portion of its net revenue.

Sumeet Bagadia, Executive Director at Choice Broking, expects further weakness in Paytm shares, highlighting the importance of maintaining a stop-loss at ₹545 apiece for those holding Paytm shares in their portfolio.

RBI Restrictions and Compliance Issues

The RBI imposed restrictions on PPBL on January 31, prohibiting the acceptance of deposits or top-ups in customer accounts, wallets, or FASTags after February 29. This action follows a system audit report and compliance validation report by external auditors.

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