Paytm’s share price witnessed a 5% decline, reaching its lower circuit at ₹406.1. Despite the resignation of Vijay Shekhar Sharma as part-time non-executive chairman and board member at Paytm Payments Bank, investors remained concerned.
The script declined today after hitting a 5 percent upper circuit for two consecutive trading sessions.
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“Paytm is likely to experience a short-term financial impact on its business along with some permanent loss of business in FY25E,” global brokerage firm UBS was quoted as saying by The Economic Times.
“We expect Paytm to lose 5-7ppt of its 25% share in the payments industry, driven by loss of wallet (2-3ppt permanent loss) and the rest due to merchant/customer. -7bp range of 7-9bp, due to loss of alt -margin wallet trading and likely easier terms to retain traders,” it said.
UBS reaffirmed its ‘Neutral’ rating on Paytm while revising down its target price ₹650 to ₹510.
It further added, “Loan origination is likely to be paused for most of Q4 and then only pick up after payment business stabilizes in FY25E. We forecast loan expenses to decline 14% YoY in FY25E. We model a smaller 18% decline in cloud and business in Q4 given less direct impact and 18% YoY growth in FY25E.”
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Earlier this week, One 97 announced the restructuring of the board of directors of its associate entity, Paytm Payments Bank. The newly appointed board members include Ex-Central Bank of India Chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former Executive Director of Bank of Baroda Ashok Kumar Garg, and Retd. IAS Rajni Sekhri Sibal. These individuals have recently assumed their roles as Independent Directors.
“OCL supports PPBL’s move to elect a board with only independent and executive directors by removing its nominee. The Company has been separately informed that Vijay Shekhar Sharma has also resigned from the Board of Paytm Payments Bank to enable this transition. PPBL has informed us. that they will begin the process of appointing a new President,” OCL said in a statement.
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Published: 28 Feb 2024, 17:00 IST