Paytm downgraded by Morgan Stanley after RBI order, target price slashed

Morgan Stanley has downgraded Vijay Shekhar Sharma backed Paytm (listed entity One 97 communication) as RBI order puts a ban on new customers coming onboard it's Paytm Payments Bank. Morgan also warns investors that they should not hope for a revival in their returns as well. Here is what the global brokerage is stating

Morgan Stanley Downgrades PayTm

• Downgrades stock to Equalweight from Overweight
• Target price also slashed to Rs 935 from Rs 1425
• Regulatory uncertainty rises with RBI order, though biz impact limited

Investors have already seen a big beating in the stock. Compared to its IPO valuation of Rs 1.5 lakh crore, the stock's valuation is now just a little over Rs 50,000 crore.

The Reserve Bank of India (RBI) on March 11 directed Paytm Payments Bank to stop onboarding of new customers. The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system, the RBI said in a release.