NEW DELHI, Feb 21
Paytm shares which had struck as low as 318.05 is resurging and hit 5 per cent upper circuit on Monday during early trade.
This comes after the fintech firm partnered with Axis Bank for merchant payment with its parent company One97 Communications moving its nodal account to Axis Bank via an escrow account. With this, Paytm’s business model is now similar to rivals like GPay and PhonePe.
Brokerage firm Jefferies India discontinued its rating of One97 Communications, by moving from ‘underperform’ to ‘not rated’, until the “news flow settles down”. “Still, +ve & -ve risks arise from user/merchant retention, revenue traction & cost-controls,” Jefferies said.
“In case of no incremental regulatory clampdown, there could be multiple scenarios for the business depending on user/merchant retention. We see +ve & -ve risks arising from user/merchant retention, revenue traction and cost-controls. On the basis of merchant/user attrition to the tune of 10-30% and a hit to net revenues (adj. for payments interchange) of 20-45%, valuation could vary widely. News on regulatory actions on other pending issues is still incoming,” it added.
On the other hand, another brokerage, Berstein, changed its rating on Paytm to ‘outperform’ with a target price of Rs 600 per stock.
