India`s Paytm shares hit record low on fears of customer loss
Shares of Indian payments firm Paytm dropped 8.5% to a record low of 386.25 rupees on Tuesday after brokerage Macquarie downgraded the stock, citing the "serious risk of exodus of customers" following the Indian central bank's action against its banking arm.
Moving customers from Paytm Payments Bank to other banks by the Feb. 29 deadline set by the Reserve Bank of India is "an arduous task," as it would require customers to submit Know Your Customer (KYC) details again, Macquarie added.
Lending partners are re-evaluating their relationship with Paytm, which could potentially lead to a decline in lending business revenue if partners scale down or terminate their collaboration with Paytm, the note said.
The Reserve Bank of India's Jan. 31 order directing a wind-down of Paytm's banking arm has resulted in the stock plummeting more than 49% and has eroded nearly $2.9 billion of shareholder wealth.
India's central bank will not review its recent regulatory action taken against Paytm Payments Bank, Governor Shaktikanta Das said on Monday.
($1 = 83.0150 Indian rupees)
