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After the action of Reserve Bank, there is a huge fall in the shares of Paytm. Barring a few occasions, Paytm shares have hit the lower circuit in almost every session during the last 3 weeks. However, even after this, a brokerage firm sees scope for a comeback in Paytm's shares.
75 percent chance of recovery
According to the information, brokerage firm Bernstein has bought shares of Paytm's parent company One97 Communications for Rs 15,000. A target of 600 has been given. In the last session i.e. on Friday, February 16, Paytm shares had hit an upper circuit of 5 percent and had reached Rs 175. Closed at the level of 341.30. This means Bernstein sees scope for a recovery of more than 75 percent in Paytm shares from current levels.
Prices fell 20-20 percent
On January 31, the Reserve Bank had taken action against Paytm Payments Bank, the banking unit of Paytm. RBI informed about this action after the market closed that day. After this, as soon as the market opened on the budget day on February 1, Paytm shares fell by 20 percent. Paytm shares continued to fall 20-20 percent every day until the market hit the circuit limit of 5 percent.
Paytm shares have fallen drastically
After the market closed on January 31, Paytm shares were at Rs 761.20. That means, before the action of RBI, the price of one share of Paytm was Rs 761.20. Before the upper circuit on Friday, Paytm shares traded at Rs. It reached its all-time low of 318.05. That is, after the action of RBI, Paytm shares have fallen by 140 percent so far.
More time given for compliance
Bernstein believes that the RBI action is only on Paytm's banking arm Paytm Payments Bank. In such a situation, there will be no impact on the rest of Paytm's business. Regarding the 15-day extension received from RBI, the brokerage firm believes that this will give Paytm additional time for regulatory compliance.
Now this is the new deadline of RBI
Let us tell you that in the action taken on January 31, RBI had immediately stopped Paytm Payments Bank from doing some work including adding new customers. February 29 was the last date for services ranging from wallet to bank account etc. Now the Reserve Bank has extended the deadline to March 15.