Mumbai: Global brokerage firm Bernstein has suggested that the best path forward for struggling fintech giant Paytm would be an acquisition by either a bank or a large non-banking financial company (NBFC).
In a recent note, Bernstein argued that such a partnership could be mutually beneficial. Banks seeking to build consumer-focused apps could leverage Paytm’s vast customer base to cross-sell their products. Conversely, Paytm could benefit from the financial muscle of a larger institution to accelerate its growth and overcome regulatory hurdles.
The brokerage also floated the possibility of a large corporate investment in Paytm, citing examples of Reliance Jio, Adani Group, and Tata Group, which are all building their fintech capabilities.
Despite these suggestions, Bernstein maintains that Paytm can achieve profitability on its own by FY27. However, the brokerage emphasized the need for aggressive cost-cutting, expansion of secured lending, and increased UPI merchant discount rate share to accelerate this timeline.
Bernstein has set a price target of INR 600 for Paytm shares, indicating a potential upside of nearly 5%.
It’s worth noting that Paytm has been facing significant challenges, including a ban on its payments bank operations by the RBI, which has led to substantial losses. The company reported a 134% year-on-year increase in losses to INR 840.1 crore in the first quarter of the current fiscal year.
