scorecardresearchMacquarie further cuts Paytm target price to <span class='webrupee'>₹</span>450; shares fall nearly 3%

Macquarie further cuts Paytm target price to 450; shares fall nearly 3%

Updated: 17 Mar 2022, 10:59 AM IST
TL;DR.

Analysts at Macquarie, including Ganapathy, started covering Paytm with an underperform rating and a price target of 1,200 ahead of the IPO.

Suresh Ganapathy of Macquarie dropped his price estimate from  <span class='webrupee'>₹</span>700 to  <span class='webrupee'>₹</span>450,

Suresh Ganapathy of Macquarie dropped his price estimate from 700 to 450,

Shares of Paytm fell another three percent during morning trade on Thursday after a global research firm cut the stock's target price further.

Paytm was trading at 617.50 per share on the NSE at 11 am, down 2.61%. 

After days of stock market hammering, Macquaire Capital has once again cut its target price for the company. Suresh Ganapathy of Macquarie dropped his price estimate from 700 to 450, citing lower values for fintech companies throughout the world.

Paytm, the Indian digital payments startup whose stock has fallen 71 per cent since its November market debut, had its price target cut even lower by a Macquarie Capital Securities (India) Pvt. analyst who was one of the first to foresee the company's market woes.

Paytm completed India's largest-ever initial public offering, but it has subsequently experienced a slew of problems.

Fintech laws and higher compliance rules, according to Ganapathy, are possible headwinds; the Reserve Bank of India stopped the company's Paytm Payments Bank venture from taking new customers on Friday, putting pressure on the stock.

 

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Share price journey of Paytm since its listing last calendar year. 

Analysts at Macquarie, including Ganapathy, commenced covering with an underperform rating and a price target of 1,200 ahead of the IPO. The initial public offering (IPO) was priced at 2,150.

The Paytm Story So Far

When it went public for the first time, the firm was valued at 1.39 lakh crore (IPO).Its market cap slipped below 50,000 crore to 47,660.04 crore.

Vijay Shekhar Sharma, the founder of Paytm, suggested at the India Digital Summit that the firm should be measured against Bajaj Finance, a non-banking financial services provider.

“This quarter we are talking about $100 million revenue from payments, which is sizable revenue People underestimate the size of payments revenue,” Sharma, the Paytm CEO, said on ETNow television channel. “Credit is the most monetisable financial service. Bajaj Finance has been there for 30-32 years, Paytm processes more loans than Bajaj today, in less than three years”

Sharma didn't specify the time period in issue, but according to the most recent figures, Paytm was outpaced by Bajaj Finance with 4.4 million loans disbursed in the December quarter. Bajaj Finance recorded 7.4 million loans.

 

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First Published: 17 Mar 2022, 08:51 AM IST