New Delhi: Reports indicate that brokerage firm Bernstein has bestowed Paytm with an ‘Outperform’ rating and set an ambitious target price of Rs 600 per share. This affirmation comes amidst ongoing scrutiny from the Reserve Bank of India (RBI), primarily directed at Paytm Payments Bank (PPBL), with no discernible intent to disrupt other integral facets of Paytm’s operations.
The differentiation in regulatory focus is crucial for understanding the nuances of the actions affecting the company, as highlighted by media reports.
Bernstein underscores the strategic advantage gained by linking merchants’ operations to a non-PPBL bank, deeming it a “significant positive” for Paytm. Additionally, the extension of the compliance deadline from February 29 to March 15 provides Paytm with a welcome reprieve to implement necessary changes in alignment with regulatory directives.
However, Bernstein also draws attention to the challenge posed by the lack of action regarding the bulk transfer of wallets and FASTags to another bank, potentially impeding certain aspects of Paytm’s financial operations.
The RBI’s recent decision to extend the deadline for halting deposit transactions at PPBL until March 15 reflects a measured approach aimed at safeguarding the interests of the bank’s customers and merchants. This extension acknowledges the need for additional time for affected parties to make alternative arrangements, aligning with public interest.
The RBI’s directive on January 31 mandated PPBL to cease accepting deposits or top-ups in various instruments after February 29, citing significant non-compliance with regulations and supervisory concerns.
Despite the regulatory hurdles, Bernstein’s ‘Outperform’ rating signals confidence in Paytm’s resilience and potential for growth, underscoring optimism in the company’s trajectory.
