The parent company of Paytm, One97 Communications Ltd witnessed a reduction in its share value by 20%. Paytm offers the services of loans despite being in the business of digital payments. The company is a non-banking lender.
The fall in the Paytm shares is a major intraday fall in the shares of the company. Paytm listed itself in the stock market two years back. And this is the first time its shares have gone down so much.
Paytm Shares Tumble Drastically
There are reports that stocks of the digital payment company have gone down in early trade. This was reported on 7th December, Thursday. The value of the Paytm shares was Rs 65.90 at 10.50 am. This is a decrease in the share value by 18.10%. It seems to be a bad moment for Paytm ever since it listed itself in the share market.
The downfall in the shares of Paytm is chiefly the result of it announcing that it will limit the loans it will grant. The firm declared on 6th December that it would not issue so many personal loans. It will restrict loans in the sub-fifty-thousand-rupee category. Paytm has taken this decision because India’s central bank has put strict regulations on loans.
The firm declared on 6th December that it is considering increasing the giving of high-ticket personal loans. In addition, it will offer more loans to commercial borrowers. Paytm wants to lend to borrowers with a low risk.
Paytm has decided to broaden its loan reach among high-credit-worthy borrowers. The company has also announced that it will modify its policy of “Buy now, pay later” (BNPL). The decision to stop giving small-ticket loans may be one reason the shares have fallen so much.
Paytm Shares Tumble Due to Change in Personal Loan Policy
The payment company is changing its policy and business strategy. It has decided to curtail postpaid personal loans of smaller amounts. They are reassessing their policies to get more profit and reduce the risk on loans they give.
The digital payment firm will continue giving personal loans of larger amounts and values. It will also increase merchant loans. The policy has caused a worry in the minds of the investors causing a fall in its shares by 20%.
Paytm will restrict unsecured loans that are below an amount of fifty thousand rupees. It has created an alarm among analysts and led to a downgrading of its shares. The change in the policy may reduce the number of loans that borrowers request from the firm by 40-50%. This applies to the postpaid personal loan category.