Achieved highest ever monthly loan disbursals in February, says Paytm; shares continue to decline, correct 9% today

Paytm shares continued its southward journey even on Tuesday as the shares tanked more than 9% after reports surfaced claiming data leaks to Chinese firms and regulatory action by the Reserve Bank of India (RBI) against Paytm Payments Bank.

As per the company, number of loan disbursals through Paytm saw 449% growth on YoY, while value of loans disbursals witnessed 366% YoY growth. Source: Reuters

Paytm shares continued its southward journey even on Tuesday as the shares tanked more than 9% after reports surfaced claiming data leaks to Chinese firms and regulatory action by the Reserve Bank of India (RBI) against Paytm Payments Bank.

In the early trade on Tuesday, shares of Paytm dropped 9% to new 52-week low of Rs 616.55 per share on the BSE.

As even Paytm shares continue to nosedive since its listing in November last year and in view of RBI restrictions, it seems to have barely impacted Paytm's loan disbursals, as per the company.

TRENDING NOW

See Zee Business Live TV Streaming Below:

In a statement on operating performance, Paytm on Tuesday said that it achieved highest ever monthly loan disbursals and sees a sustained growth in payments business.

As per the company, number of loan disbursals through Paytm saw 449% growth on YoY, while value of loans disbursals witnessed 366% YoY growth.

"Lending business scales to 4.1 million loan disbursals during the first two months of the quarter (y-o-y growth of 449%), with approximately 2.2 million loans disbursed in February 2022 alone. This aggregates to a total loan value of Rs 2,095 Cr (y-o-y growth of 366%)," said Paytm.

On the RBI's action against Paytm Payments Bank Limited, the company said the bank is taking immediate steps to comply with RBI directions. This does not impact any existing customers of PPBL, who can continue to use all banking and payment services without interruption. All existing users of Paytm UPI, Paytm Wallet, Paytm FASTag, and bank accounts can continue to use these instruments, including debit cards and net banking, for payments.

"Paytm believes that the measures imposed upon PPBL will not materially impact Paytm’s overall business. This direction does not have an impact on the services that Paytm provides in partnership with other financial services institutions," the company said in a regulatory filing.

What should investors do with Paytm stock?

Santosh Meena, Head of Research, Swastika Investmart Ltd, suggested investors to avoid the stock.

We didn't see any positive trigger that could have helped the stock to recover. We don't have clarity of business model and timing of profitability, while there are regulatory headwinds. Therefore, new investors should avoid this stock despite a sharp fall in the price, while existing investors may also look for exit opportunities," said Meena

He, however, underlined that things can become better only if the company manages to come out of regulatory issues successfully and witness any signs of profitability.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)

TAGS: