The Reserve Bank of India has revoked the licence of Paytm Payments Bank Limited. The impact of this decision was also felt on Paytm's share price. The share price of Paytm's parent company One97 Communications Limited fell by nearly 8 percent on Monday.
As a result, the company's market capitalisation has also taken a hit. Would buying this stock at lower prices be profitable? What is the advice of market experts regarding this share?
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Last Friday, this share closed at Rs 1,147. On Monday morning, One97 Communications' shares opened at Rs 1,084 on the National Stock Exchange. Due to a fall of nearly 8 percent, the company's share price dropped to Rs 1,051 on Monday. Though it recovered from the morning fall, at 11:15 AM, this stock was down by more than 3 percent.
Paytm services continue unaffected
Regarding the revocation of Paytm Payments Bank's licence, the Reserve Bank of India stated that Paytm Payments Bank failed to comply with the conditions set at the time of obtaining the licence. Additionally, there are allegations of violating certain rules of the Banking Regulation Act, 1949. Despite the revocation of Paytm Payments Bank's licence, the Paytm app, Paytm UPI, QR code payments, and payment gateway services have not been discontinued. All these services continue to operate normally as before.
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Despite the revocation of the payments bank licence, Paytm has informed shareholders that this decision will not significantly impact the company's business and financial position. Brokerage firm Bernstein shares the same view. They have reassured investors about this stock and have not changed their 'outperform' rating. The firm has set a target price of Rs 1,500 for Paytm's stock.
International brokerage firm Goldman Sachs has also maintained a 'buy' rating on Paytm's parent company stock. However, the firm has reduced the target price for this stock from Rs 1,470 to Rs 1,400.
{News Ei Samay does not provide investment advice anywhere. Investment and trading in the share market or any field involve risk. Proper study and expert advice are recommended beforehand. This news is published for educational and awareness purposes.}
