Due to the decision taken by the Reserve Bank of India, there was a huge fall in the shares of Paytm today. Shares of One 97 Communications fell sharply in early trading on Monday, when the Reserve Bank of India (RBI) canceled the license of Paytm Payments Bank. This step ended all hopes of restarting the banking branch of the company. Paytm shares were trading at Rs 1,077, which was 8 percent below the day’s low.
This decline came as investors reacted to the last regulatory action taken against Paytm Payments Bank. Many strict restrictions were imposed on Paytm Payments Bank from January 2024. Due to the earlier action, there was a ban on new deposits and the bank had to gradually wind down its operations, but now with this new step of RBI, its ability to work as a bank has completely ended. In a statement, the company said the development would not have a material impact on its near-term earnings as the payments bank business had already been largely spun off and its operations had been transitioned to a partner-based model.
Also read- Paytm Payment Bank got a big blow, RBI canceled the license, this is the reason
Goldman Sachs opinion on Paytm
Goldman Sachs has maintained its ‘Buy’ rating on Paytm shares, but has reduced its target price to Rs 1,400 per share from Rs 1,470, ET reported. This new target price means that there is a scope for an increase of about 31% from the previous closing price of the share.
The international brokerage firm said that it views the cancellation of the banking license of Paytm’s subsidiary by RBI as another negative development. However, according to the report, this will not have any direct financial impact on Paytm. The firm said its main risk is the potential impact on customer or merchant confidence. Goldman Sachs further said that even though this may put pressure on the stock in the near future, the momentum of Paytm’s core business is still intact.
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