Paytm nosedives ~20% after company looks to curb low-value personal loans

7 Dec 2023 , 10:15 AM

Shares of One 97 Communications, which operates Paytm, fell 20% to a day’s low of Rs 650.45 on the NSE on Thursday after the company informed exchanges that it will issue fewer sub-Rs 50,000 (approximately $600) personal loans, weeks after the central bank tightened consumer lending rules in response to a surge in demand.

The fintech lender stated that it will increase its portfolio of higher-ticket personal and commercial loans to lower-risk and high-credit-worth customers, anticipating ‘good demand’ for loans over Rs 50,000.

This follows the Reserve Bank of India (RBI) recently increasing the amount of capital that banks and non-bank lenders must keep aside to cover probable defaults when making personal loans.

The RBI tightened its criteria in response to an increase in such small-ticket loans, notably those of less than 50,000 rupees, as well as an increase in delinquencies.

Sub-50,000-rupee loans account for around 38% of Paytm’s overall loans.

At around 10.12 AM, Paytm was trading 15.97% lower at Rs 683.10, against the previous close of Rs 813.05 on NSE. 

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