Paytm’s shares took another nosedive, plunging a whopping 20 percent for the second consecutive day. The chaos ensued after India’s central bank put the brakes on much of the digital payments giant’s operations.
The Reserve Bank of India threw down the regulatory gauntlet, slamming Paytm Payments Bank Ltd. with orders to halt a slew of activities due to what they called “persistent non-compliance and supervisory concerns.” Talk about a tough break!
A post-market conference call on Thursday aimed to soothe rattled nerves but fell flat, failing to restore the faith of jittery investors. Adding insult to injury, big-name brokerages like JPMorgan Chase & Co. and Citigroup Inc. piled on, downgrading Paytm’s stock to a resounding “sell.”
The market bloodbath has wiped out over $2 billion in Paytm’s market value, leaving the company—backed by heavy hitters like Alibaba’s Antfin Singapore Holding Pte. and SoftBank Group Corp.—reeling.
JPMorgan’s analysts, led by the insightful Ankur Rudra, sounded the alarm bells, pointing out that the central bank’s order hits Paytm’s bread and butter—its core payments business—where it hurts the most. Ouch! They warned that unless Paytm swiftly finds a new banking buddy and sorts out its compliance issues, its once-mighty “merchant-consumer” ecosystem could lose its sparkle.
To add insult to injury, Paytm’s stock is now down a staggering 77 percent from its glory days of the initial public offering back in 2021. It’s like watching a once-proud racehorse limp to the finish line.
But wait, there’s a glimmer of hope! Paytm brass assured investors during the conference call that they’re gunning to get things back on track by early March. Plus, they’re hustling to cozy up to other banks faster than you can say “regulatory crackdown.”
