Neutral One 97 Communications For Traget Rs.575 - Motilal Oswal Financial Service Ltd
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
Key takeaways from management concall
PAYTM hosted an analyst call to discuss the impact of the RBI’s restrictions on Paytm Payments Bank Ltd (PPBL) and the way forward. Following are the key takeaways:
* PPBL, an associate company of One97 Communications Ltd. (PAYTM), has received regulatory directives from the RBI and is taking immediate steps to comply with the directives. PPBL users can use their savings account balances, wallets, FASTags, and NCMC account till 29th Feb’24.
* PAYTM, as a payments aggregator for online and offline merchants, works with various banks, including PPBL. Hereon, PAYTM will leverage its relationships with other banks and not with PPBL.
* As directed by the RBI, PAYTM and Paytm Payments Services Ltd. (PPSL) are in the process of moving their nodal accounts from PPBL to other large commercial banks.
* PAYTM’s marketing and financial services businesses are not affected by the RBI action on PPBL.
Partnerships with other banks to expand; other businesses to continue
* PAYTM highlighted that its payments services will continue as usual, while its financial services business may experience a temporary disruption in 4QFY24 as the company will focus on business transition.
* Additionally, on the partnership front, the company intends to collaborate with third-party banks to adhere to new regulations, maintaining operations similar to other payment companies.
* The company noted that products, like FASTag, are already being issued in collaboration with other banks. PAYTM clarified that unrelated businesses such as loan distribution, insurance distribution, and equity broking will continue unaffected by the PPBL situation.
* The Paytm Payment Gateway business for online merchants will continue to offer payment solutions to existing merchants. Offline merchant payment services, including Paytm QR, Paytm Soundbox, and Paytm Card Machine, will also continue, accommodating new offline merchants.
Existing business to be transitioned to other banks
* To facilitate the business transition, the QR code VPA needs to be migrated to other banks. This extensive process will unfold in two phases: 1) reaching out to merchants and consumers; 2) the actual transition.
* The company anticipates that the terms of the new banks will resemble those of the existing VPA banks.
For More Motilal Oswal Securities Ltd Disclaimer http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html SEBI Registration number is INH000000412
