Paytm cuts small-ticket loan portfolio: What that means for stock - explained

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₹50,000 and expand higher-ticket loans. In an exchange filing on Wednesday, December 6, One97 Communications Limited (OCL) which owns the brand Paytm, said it will further "expand its business to offer higher ticket personal and merchant loans, which would be targeted at lower-risk and high-credit worthy customers, in partnership with large banks and NBFCs (non-bank financial companies)." Besides, the company said it will cut down on smaller loans, keeping in mind the prevailing macro conditions and the Reserve Bank of India's rules on consumer lending.

"On the back of the recent macro development and regulatory guidance, in consultation with lending partners, in line with its continued focus on driving a healthy portfolio, the company has recalibrated the portfolio origination of less than ₹50,000, which is prominently the postpaid loan product and will now be a smaller part of its loan distribution business going forward," One97 Communications said in its exchange filing. Also Read: Paytm to cut down on small-ticket loans after RBI tightens consumer lending norms, set to expand higher-ticket ones Paytm's announcement on consumer lending triggered a sharp selloff in the stock as it cracked 20 per cent to hit its lower circuit of ₹650.65 in early trade on the BSE on Thursday.

Also Read: Paytm hits 20% lower circuit on brokerage downgrades as company decides to cut down on small ticket loans Paytm share price has gained 53 per cent this year (as of December 6 close) against a 14.5 per cent gain in the equity benchmark Sensex. Paytm's decision on consumer lending has come after the Reserve Bank of India tightened consumer lending rules in October, noting a rise in small-size loans and raised the risk weights for lenders