JEFFERIES Financial Group has turn out to be the primary main international brokerage to drop protection on Paytm-operator One 97 Communications till the information circulation across the struggling Indian fintech main “settles down”.
The funding financial institution has moved the inventory to “not rated”, weeks after reducing it to underperform after the Reserve Bank of India final month ordered Paytm Payments Bank (RBI) to halt its key operations, citing non-compliance. Paytm has seen its shares lose greater than half of their worth because the banking regulator’s shock clampdown amid issues over the continuity of its enterprise mannequin.
“Without a banking license, Paytm’s business model will now become similar to pure payment service providers,” analysts Jayant Kharote and Prakhar Sharma wrote in a Feb 18 observe. “Paytm’s focus will now move to ensuring customer retention, and we believe it will dip” into its 85 billion rupees (S$1.4 billion) money reserves for spends on retaining customers, the analysts mentioned.
The Noida-headquartered firm has tied up with Axis Bank to exchange affiliate Paytm Payments Bank to proceed its service provider funds settlement operations, permitting it a shot to remain in enterprise. Paytm’s shares jumped by their 5 per cent every day restrict in Monday (Feb 19) buying and selling.
Meanwhile, the RBI final week granted Paytm an extension of the deadline to wind down a lot of its enterprise. The firm has been given till Mar 15 to cease accepting new deposits, from Feb 29 earlier. BLOOMBERG
Source: www.businesstimes.com.sg”