Paytm Share Price Target 2026: Shares of One97 Communications, the parent entity of fintech Paytm, crashed as much as 8 per cent during the early trade today, April 27, after the Reserve Bank of India (RBI) had cancelled the Paytm Payments Bank (PPBL) licence.
However, brokerages have maintained bullish call on the stock.
Why did RBI cancel Paytm Payments Bank's licence?
Last week, the Reserve Bank of India said it has cancelled the banking licence of Paytm Payments Bank, effective Friday, April 24. In a statement, it said Paytm Payments Bank can no longer conduct banking business under the Banking Regulation Act.
The central bank stated that the bank's affairs and management were not in the interest of depositors or the public. It further added that the bank failed to follow the conditions of its Payments Bank licence.
"The Reserve Bank of India (RBI) has, vide order dated April 24, 2026, cancelled the banking licence issued to Paytm Payments Bank Limited under Section 22(4) of the Banking Regulation Act, 1949 ('BR Act') effective from close of business on April 24, 2026. Consequently, Paytm Payments Bank Limited is prohibited from conducting the business of 'banking' as defined in Section 5(b) or any additional business specified under Section 6 of the Banking Regulation Act, 1949 with immediate effect," the RBI statement said.
Brokerage radar
Bernstein on Paytm
- Maintain OUTPERFORM.
- Target price Rs 1500.
- RBI cancels Payments Bank licence citing governance and compliance concerns.
- Development seen as negative but largely anticipated given past regulatory actions.
- No impact on core business as PPBL operations were already shut and ring-fenced.
- No financial hit expected as investment in PPBL already written off.
- Separation between Paytm and PPBL limits operational and earnings risk.
- Regulatory overhang persists given strong language from RBI.
- Potential positive optionality from applying for NBFC/PPI licences post closure.
- Overall impact sentimentally negative but fundamentals unchanged.
Emkay on Paytm
- BUY rating maintained on Paytm with DCF-based target price of Rs 1,500.
- Core Paytm business outlook intact; strong growth seen in payments and financial services.
- Analysts project ~24% revenue CAGR for Paytm over FY26-FY28E.
- Valuations at ~30x EV/EBITDA and ~35x P/E seen attractive by analysts.
Paytm's response
Paytm, in an exchange filing, said it has no exposure or material business link with PPBL and it offers no services in partnership with the bank as well.
The fintech said PPBL operates independently and there is no board overlap.
Paytm said One 97 Communications Ltd. had already impaired its Rs 227 crore investment in PPBL as of the end of financial year 2024.
On April 25, the PPBL board and shareholders passed resolutions to wind up the company. PPBL's winding-up will have no material impact on One 97 Communication Ltd's business, operations, or financial conditions, the exchange filing added.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
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