Foreign brokerage Bernstein on Saturday said the Reserve Bank of India's actions seem to be focused on Paytm Payments Bank and may not disrupt Paytm's other functions.
Continuing of merchants' operations via non-Paytm Payments Banks is viewed as major positive, as the foreign brokerage suggested an 'outperform' call on the stock with a target of Rs 600.
In its bullish case scenario , Macquarie recently factored in a 25 per cent decline in distribution revenues for Paytm against 60-65 per cent in its base case scenario. "This clearly assumes partnership and limited scale down from the lending partners. Further, our cash burn declines to 25 per cent vs 50 per cent in our base case scenario. This implies valuation of Rs 540 vs Rs 275 in our base case scenario," it said.
The Bernstein report came after the RBI's much-awaited FAQ on Paytm hinted that Paytm QR, Soundbox, Card machine will continue to work beyond March 15. Various UPI services under the fintech will also continue work beyond March 15 deadline.
Paytm on Friday said it has partnered with Axis Bank for the settlement of merchant payments. The company issued a release stating that One97 Communications has shifted its nodal account to Axis Bank via an escrow account that it has opened with it.
The shift of nodal account to Axis Bank will ensure seamless merchant settlements as before, the release from One97 Communications added.
According to One97 Communications, the parent company of Paytm, Paytm QR, Soundbox and card machine will continue to operate seamlessly for all their merchant partners. Additionally, the Reserve Bank of India (RBI) has confirmed the continued seamless functionality of Paytm QR, Soundbox, and card machines beyond March 15.
According to Paytm, merchants with fund transactions connected to any bank account other than Paytm Payments Bank need not worry about disruptions.