Comments
Morgan Stanley Asia (Singapore) bought 50,00,000 shares of One 97 Communications, Paytm’s parent company, for ₹487.2 apiece in a bulk deal amounting to about ₹244 crore.
The transaction was executed towards the end of market close on Friday, according to a source.
One 97 Communications remained locked in a lower circuit for the second consecutive day on Friday at ₹487.2.
The company said in a statement that its services will continue to remain operational beyond February 29 as most of the services offered by Paytm are in partnership with various banks (and not just the associate bank).
“The directives from RBI are on Paytm Payments Bank and not Paytm,” the company said. This does not impact user deposits in their savings accounts, wallets, FASTags, and NCMC accounts, where they can continue to use the existing balances, it said.
Brokers’ call
A few brokerages have downgraded the stock given the recent directives from the RBI. Jefferies, for instance, has downgraded the stock to ‘underperform’ from ‘Buy’ with a price target of ₹500.
“RBI’s strongly worded restrictions on Paytm Payments Bank reflect concerns on persistent non-compliances,” the brokerage said in a note on Thursday. “Tightening of compliance/governance is the way out.”
Direct impact on wallets and payments can be 20-30 per cent of Ebitda and reputational impact on lending partnerships can impact further by 20-25 per cent. The brokerage has cut the FY25-26 Ebitda by 45 per cent.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.