Paytm stock tumbles 4%, nears all-time low on reports of lending partners invoking loan guarantees

So far this year, the stock of Paytm has crashed nearly 50 percent, underperforming 3 percent rise in the benchmark Nifty 50 index during the same period

Shares of Paytm, owned by One 97 Communications, saw a decline of over 4 percent to Rs 320 per share on May 8. This fall comes amid reports indicating that Aditya Birla Finance, one of the fintech firm's key lending partners, invoked loan guarantees due to repayment defaults from customers. The stock hovered close to its all-time low of Rs 318, seen on February 16, 2024.

So far this year, the stock of Paytm has crashed nearly 50 percent, underperforming 3 percent rise in the benchmark Nifty 50 index during the same period.

Apart from Aditya Birla Finance, other lenders such as Piramal Finance and Clix Capital also pulled the plug on their partnerships with Paytm after RBI barred Paytm Payments Bank from operations, reports said.

The fintech major continued to see a dip in Unified Payments Interface (UPI) transactions for the third straight month in April. The company registered 1,117.3 million transactions in April, down 9 percent month-on-month (MoM) in volume from 1,230.04 million transactions in March.

The company's market share in the UPI applications came at 8.4 percent in April, down from 10.8 percent in February and 9.13 percent in March.

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For the January-March quarter (Q4FY24), analysts at Motilal Oswal pegged Paytm's revenue from operations to decline by 21.5 percent year-on-year (YoY) to Rs 1,830 crore from Rs 2,340 crore in the year-ago period. Its loss is also expected to widen to Rs 470 crore in Q4FY24 from a loss of Rs 170 crore in Q4FY23.

"We expect operating profitability to decline due to RBI's ban on Paytm Payments Bank. We expect a decline in disbursements and gross merchandise value. Any further impact of RBI notification will be a key monitorable," the brokerage firm added, sharing a 'neutral' rating with Rs 475 target price.