Today (April 10), Paytm witnessed a decline of almost 3% in its share price following the announcement of Surinder Chawla’s resignation as the Managing Director and Chief Executive Officer of Paytm Payments Bank. Chawla attributed personal reasons for his departure and specified that he would officially step down from his responsibilities on June 26. In response to Chawla’s resignation, Paytm parent company One 97 Communications disclosed that “nearly all agreements between the company and PPBL have been terminated,” indicating significant changes within the organization’s structure.
In a continued saga, the Reserve Bank of India (RBI) imposed stringent business restrictions on Paytm Payments Bank Limited (PPBL), including a halt on accepting new deposits and conducting credit transactions effective February 29. Subsequently, this deadline was extended to March 15, exacerbating the challenges faced by the company. Anticipating the regulatory hurdles, Paytm navigated strategic alternatives, securing approval from the National Payments Corporation of India (NPCI) to participate in Unified Payments Interface (UPI) services as a third-party application provider (TPAP) under the multi-bank model.
Despite efforts to adapt, Paytm’s competitive standing in the UPI ecosystem faltered significantly. In March, the company’s UPI market share plummeted to 9%, marking its lowest level in the past four years, according to data sourced from the NPCI website. This decline follows a preceding downturn in February when Paytm’s market share dropped to 11% from January figures, directly correlating with the RBI’s stringent measures imposed on PPBL.
Bank of America (BofA) has reinstated its coverage of Paytm stock with an ‘underperform’ rating. The financial institution has set a target price range of ₹400, indicating a potential downside of 1% from the April 9 closing price of ₹404.50 on the National Stock Exchange (NSE). According to the brokerage, Paytm is anticipated to experience incremental growth in its lending operations.
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