GDP to decelerate in 2025, RBI to cut rates soon: Goldman Sachs
It forecast India's headline inflation at 4.2 per cent (average) in 2025 with food inflation at 4.6 per cent.
Shares of Paytm were locked at 20 per cent lower circuit for the second consecutive day on Friday after the Reserve Bank of India
imposed several sanctions on it.
The stock cracked to Rs 608.80 on the BSE on Thursday and at the NSE, it tumbled 19.99 per cent to hit the lowest trading permissible limit for the day of Rs 609.
The company’s market capitalisation (Mcap) also eroded by Rs 9,646.31 crore to Rs 38,663.69 crore in early trade. However, any interest, cashbacks, or refunds may be credited back to customers anytime.
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The RBI in its order has laid restrictions against accepting new deposits and carrying out credit transactions after February 29. Brokerages turned wary after the RBI directive, leading to a decrease in target prices for the stock.
Brokerage firm downgraded Paytm to ‘underperform’ from ‘buy’, slashing the target price by more than half to Rs 500 from Rs 1,050 per share.
Jefferies said that it could see a collateral impact on lending business, which accounts for 20 per cent of revenues, if Paytm’s lending partners limit business due to operational or governance risks, following the Reserve Bank of India’s statement imposing restrictions on Paytm’s payment bank due to non-compliance.
“Key impact can be on the lending business (+20 per cent of revenues) if lending partners limit business due to operational or governance risks,” Jefferies said.
One 97 Communications had said it will take steps immediately to comply with the RBI’s directions.
As a result, it expects a worst-case impact of Rs 300 crore (USD 36.12 million) to Rs 500 crore to its annual earnings before interest, tax, depreciation and amortisation (EBITDA).
Macquarie, too, cut its target price to Rs 650 per share, while maintaining a ‘neutral’ stance on the stock. The brokerage firm does not see any near-term solution to Paytm’s problems as it believes the lapses found by the RBI to be material.
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