Paytm loses 1.2 bln in market value
RBI action to hit core business, credibility analysts
Jefferies, JPMorgan slash Paytm rating, target price

BENGALURU, Feb 1 Reuters Indian digital payments firm Paytm lost a fifth of its market value on Thursday after the central bank ordered its payment bank subsidiary to halt its business, sparking fears for the company39;s profitability and reputation.

Paytm39;s stock fell to a sixweek low of 609 rupees, erasing around 1.2 billion in value from the company also known as One 97 Communications. The stock was down 20, at the bottom of its exchangeimposed daily trading band.

The Reserve Bank of India RBI on Wednesday ordered Paytm Payments Bank to stop accepting fresh deposits in its accounts or popular digital wallets from March, raising worries over revenues from the company39;s main payments business.

That could be a precursor to cancelling the bank39;s license, a person familiar with the matter told Reuters. Paytm and the RBI did not immediately respond to requests for comment.

The RBI39;s action raises concern that Paytm39;s lending partners might reconsider their relationships with the company, which owns 49 of the payments bank, analysts said. It could stall efforts by Paytm, which rose to fame after India banned highdenomination notes in 2016, to attain profitability on a net basis.

The stock remains at a fraction of its 2021 listing price despite having climbed 20 last year and a further 20 this month before the…