Paytm Shares Rebound After Worst Fall Since Listing
The stock had hit the lower circuit on Friday after the company decided to curtail low-value loans.
Shares of Paytm parent One97 Communications Ltd. recovered on Friday after it tumbled to hit the 20% lower circuit, the worst fall since listing.
The stock had hit the lower circuit after analysts downgraded it as the company decided to bring down the level of unsecured loans under Rs 50,000 in a calibrated manner.
Paytm’s move comes after the Reserve Bank of India tightened norms for unsecured retail loans in November. The central bank made consumer lending costlier for banks and non-bank lenders, and also asked them to limit exposure to such loans, amid growing risk concerns.
Paytm's stock rose as much as 2.80% during the day at Rs 679.85 apiece on the NSE. It was trading 1.50% higher at Rs 671.30 apiece compared to a 0.38% advance in the benchmark Nifty 50 as of 10.53 a.m.
It has risen 26.72% year-to-date. The total traded volume so far in the day stood at 2.7 times its 30-day average. The relative strength index was at 20, indicating the stock may be oversold.
Ten out of the 15 analysts tracking Paytm have a 'buy' rating on the stock, while five recommend 'hold', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 49.7%.
