For Paytm and its parent company One 97 Communications, Tuesday just got worse. Tuesday's trading saw a 9% decline in the fintech share as Macquarie lowered its target price for the stock from Rs 650 to Rs 275.

When the stock was originally listed in 2019 on Paytm, Macquarie was the first to release a target. Just before Paytm's offering, Macquarie had then recommended a target price of Rs 1,200 for the shares.

Significant chance of a client exodus

According to the brokerage, Paym faces "a serious risk of exodus of customers (overall 330mn customers and 110mn MTUs – monthly transacting users and merchant subscription network of 10.6mn) which significantly jeopardizes its monetisation as well as its business model."

Migration is a difficult undertaking

Moreover, Macquarie is not persuaded by the switch to alternative bank rationale. "Moving payment bank customers to other bank accounts or moving related merchant accounts to other bank accounts will require KYC (Know your customer) to be done again based on our channel checks with partners, indicating that migration within RBI's Feb 29th deadline will be an arduous task."

Significant chance of a client exodus

According to the brokerage, Paytm faces a serious risk of exodus of customers (overall 330mn customers and 110mn MTUs – monthly transacting users and merchant subscription network of 10.6mn) which significantly jeopardizes its monetisation as well as its business model."