Macquarie cuts Paytm targets over ‘serious risk of customer churn’ | TechCrunch

Macquarie slashes 12-month price target for One97 Communications, owner of digital payments company Paytm, citing customer concerns Fatal regulatory scrutiny Macquarie, which had predicted a collapse in Paytm’s share price ahead of its listing, cut its target to Rs 275 (57.7% down from the previous target of Rs 650), the most brutal of all major brokerages .

Paytm fell more than 6% to 395 rupees ($4.76) on Tuesday morning, RBI’s crackdownThe Reserve Bank of India late last month ordered Paytm to shut down all operations of Paytm Payments Bank, an associate company of Paytm that handles all its transactions.

A team of analysts led by Suresh Ganpathy wrote in a note on Tuesday that they believe Paytm’s revenue will be significantly reduced and the regulatory crackdown will bring “serious risks of customer churn.”

The target price of Rs 275 would value Paytm at about $2.1 billion, a sharp decline from its peak market capitalization of nearly $20 billion at the end of 2021. As of the end of December, Paytm had a cash balance of $1.072 billion.

“With lower revenue from our payments and distribution business (60-65% lower than in fiscal year 2025/26), we have significantly cut our revenue. Transfer payment bank customers to another bank account or transfer related merchant accounts to other bank accounts KYC (Know Your Customer) checks will be required as per our channel checks with partners and we will be migrating again which indicates that migrating within RBI’s February 29 deadline will be a difficult task.”

Macquarie’s 12-month bull and bear price target forecasts for Paytm.

Paytm, which generates most of its revenue from lending, may also face challenges retaining lending partners, Macquarie added. Paytm does not have a license to operate as a non-banking financial company (NBFC) and acts as a distributor connecting lending partners with borrowers.

“Our access checks with some lending partners indicate that they are re-examining their relationship with Paytm, and if partners scale back or terminate their relationship with Paytm, it could ultimately lead to a decline in lending revenue. AB Capital is one of Paytm’s largest companies One lending partner has cut BNPL’s exposure to Paytm to Rs 6 billion from its current peak of Rs 2,000 crore, and we believe further declines are expected.”

The Reserve Bank of India said last week that it would onlypersistent failure to comply with regulationsThe company’s first comments following a crackdown on Paytm last week raised existential questions about the future of the leading financial services company, according to the rules.

Reserve Bank of India (RBI) Governor Shaktikanta Das said the central bank always engages with regulated bilateral entities and urges them to take corrective action. If the central bank takes action, “it always engages with regulated bilateral entities and urges them to take corrective action. If the central bank takes action, “it is always proportional to the gravity of the situation,” Das told a media briefing “As a responsible regulator, all our actions are in the best interests of system stability and protect the interests of depositors or customers,” he added.

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