Paytm share price hits 20% lower circuit limit on brokerage downgrades

livemint.com:

Paytm, tumbled in today's trade, locking at the lower circuit limit of 20%, reaching 650.45 apiece. This sharp fall came after the company announced plans to cut back small ticket loans amid regulatory changes.

According to analysts, the company's decision to shift focus away from small ticket-size Buy Now, Pay Later (BNPL) loans will have a significant impact on its overall loan originations through the platform, given that this segment constitutes over 50% of total disbursements. Also Read: Paytm to cut down on small-ticket loans after RBI tightens consumer lending norms, set to expand higher-ticket ones "On the back of 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," the company said in an exchange filing on Wednesday.

However, Paytm affirmed that merchant loans will remain a focal point. Since these loans are provided for business purposes to small merchants, they remain unaffected by recent regulatory guidance.

The company is now shifting its focus to higher-ticket personal and merchant loans, targeting lower-risk and high-credit-worthy customers through collaborations with major banks and NBFCs. Also Read: Paytm wallet services are back after a brief outage A Paytm Spokesperson said, "As the lending distribution business is maturing, we see newer opportunities of expansion to offer high-value personal and merchant loans.