Global research firm Macquarie said that the  decision to  restructure Paytm’s loan  portfolio was a  preemptive  measure taken in consultation with  partners.  

  “Asset  quality  in  the personal  or deferred  loan  segments has not deteriorated,”  Macquarie said in a note. One 97 Communications, the parent company of  Paytm,  had earlier decided to  reduce  its  microloans.  

 Macquarie has a  ‘neutral’  stance on Paytm and has maintained  a  target price of ₹900 per  Paytm  share, representing a potential upside of  nearly 46%  from  Monday’s  closing price. 

  “For  deferred  loans, management  has  indicated that  this was  a risk-averse  decision  based on  the strains seen  in certain  parts  of the system. While the CoF for NBFC  counterparties  will increase  due to  higher risk  weighting on NBFC  bank  financing,  for products  like payday loans,  the impact is  insignificant due  to  product duration.  short  product  (up to 30  days),”  the research  firm said.  

  Paytm  management  said there is an opportunity to increase the size of large  personal loans  as some  customers  have also qualified  for higher  loan amounts earlier,  but with  Paytm’s  lending model  limited limited  to  a note amount of  up to  0.3 million yen,  the  above-mentioned  customers  will borrow.  from other lenders. 

  “In addition,  customers  are  also  taking out  personal loans through Paytm despite having  primary deposit  relationships  with other banks. Paytm  identified  this as an opportunity in the  high-cost (₹0.3-0.7 million)  personal loan  market,  Macquarie said. 

  Previously,  the fintech giant  had  also increased  the size of its inquiries  for  clients that were of  good quality  and  did  not  face  any  asset  quality concerns.  “This  can be  clearly  seen  as  the number of  personal loan  vouchers has  nearly doubled in the past two years. The company  has  started  offering high-priced  personal  loans  in the past 4-5  months,” he  added.  

 In the payments space, Paytm management expects merchants and customers to remain  loyal to  the service proposition. In the lending segment, given the competition, Macquarie believes that Paytm  aims  to  continue to upsell to high-quality customers where  it has a data advantage. 

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