This is indeed serious and this has been on the wall for quite some time. Although the degree of harshness by the regulator is bit surprising. Multiple times RBI had barred Paytm Payments Bank from onboarding any new customers, the last being from 2022. Other than that the compliance issues in Fastag, then findings in audit report, compliance issues by RBI related to KYC have always been there and has eventually led to this. This looks like effective end of the Payments bank as well as the wallet (unless company clarifies that RBI has given some deadline to correct the compliance shortcomings). Other than this the lending business looks to be in stress where it is visible on the defaults reported, and the stoppage of postpaid loans is also going to reflect in next quarterly report. There is a high chance that the lending partners will now want to distance themselves and that is going to lead to even higher defaults and higher wealth erosion in this scrip. If this happens then it is going to take years for the stock to recover. Won’t be surprised if the stock opens with a lower circuit and continues to do so for next few sessions.
Hope to be proven wrong for the sake of huge workforce employed by Paytm.
| Subscribe To Our Free Newsletter |
