Paytm slips 11% on Macquarie’s risk alert on RIL financial foray

Market


Paytm’s stock plunged over 11% to the lowest point on Tuesday after a report from Macquarie sounded out a potential risk for the Noida-based payments firm from Reliance Industries Ltd’s Jio Financial Services.

Shares of One97 Communications, the parent of Paytm, slipped to 475.55 on the National Stock Exchange. “Entity could be the 5th largest financial services company in India in terms of net-worth,” Macquarie analysts said, adding that among fintechs, Paytm could be “most at risk.”

Last month, RIL said it will demerge its financial services business and list it on the stock exchanges under Jio Financial Services Ltd to tap the growing demand for new age financial services for retail and small-business customers.

Macquarie said with its access to huge amounts of data, gathered from a non-financial relationship, Jio Financial Services will be able to differentiate from other fintechs. It will be able to process and analyse the data in real-time, and offer financial services similar to larger corporations such as Alibaba, Amazon, Apple, Facebook, Google.

With RIL’s large balance sheet, NBFC license and network, Jio Financial Services has good resources to leverage. It is being led by banking veteran K V Kamath. “RIL can significantly disrupt the payments business and be a real threat to fintech business models,” the report said.

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