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Paytm Stock Slides 20% on Brokerage Downgrades Following Decision to Cut Small Loans

Paytm's stock price dropped by 20% because brokerage firms think company's performance will be lower. This happened after the company decided to reduce the number of small loans it gives to people.

Today, the price of One97 Communications, which owns the digital payment app Paytm, dropped by 20% to reach ₹650 per share. The company’s stock dropped a lot after it said it will reduce the number of small loans it gives out.

1 min read 2023-12-07, 05:20 PM IST


One97 Communications, which owns the Paytm app, saw a big drop in its shares today. They went down by 20% to ₹650. 45 per share The company’s decision to reduce small loans because of new rules caused a big drop in business.

Experts believe that changing the focus away from small Buy Now, Pay Later loans will have a big impact on the number of loans given out, because more than half of the loans are in this category. On Wednesday, the company announced in a official document that they are changing the way they give out small loans because of new rules and advice from regulators. They are working with their lending partners to do this.

Even though Paytm is changing its strategy, they said that they will still be focusing on giving loans to small businesses. The rules about these loans have not changed because of recent government regulations.

Also Read; Market Rally; Nifty 50 and Sensex Surge, Investors Pocket ₹6 Lakh Crore in a Day.

The company is focusing on giving bigger loans to people and businesses who are less likely to have problems paying them back. They’re doing this by working with big banks and financial companies. A Paytm representative said, “As our lending business grows, we see new chances to give bigger personal and business loans. “
After this news, investment firms changed the prices they think the stock will reach. Investment company Goldman Sachs lowered its recommendation for the stock from ‘buy’ to ‘neutral’ and changed the target price to ₹840 per share. “Jefferies changed its target price to ₹1,050 from ₹1,300 and still thinks it’s a good buy. ” Bernstein cut its target price from ₹1,100 to ₹950. Motilal Oswal, a brokerage firm, thinks it’s good to buy the stock and has set a price target of ₹1,025 per share.
Motilal Oswal said that Paytm is focusing more on giving larger loans to people and businesses. They think there is a lot of interest in this and that they are managing the risks well.
At 10:45 in the morning, the stock price went down by 18. 88% and was trading at ₹659. 50 per share.
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