Paytm’s core business intact despite PPBL licence cancellation: Emkay Global

Emkay Global said that Paytm’s core business remains unaffected despite the Reserve Bank of India (RBI) cancelling the banking licence of Paytm Payments Bank Ltd (PPBL), effective April 24, 2026.

The brokerage said it does not expect any financial or operational impact on One 97 Communications, the parent company of Paytm , as all commercial agreements between Paytm and PPBL were terminated by March 2024, and the equity investment had already been fully impaired as of March 31, 2024. It added that the listed entity remains “legally ring-fenced” from the payments bank.

“The PPBL licence cancellation is largely a formality, as the entity has been in an effective run-down since February 2024 when fresh deposits were barred,” Emkay said in a report.

The RBI had earlier directed PPBL to stop accepting deposits from January 31, 2024, and the latest move formally ends its banking operations. Emkay said the cancellation merely formalises the closure process.

While acknowledging that the RBI’s language in the order appears strict, the brokerage said Paytm’s compliance posture at the listed entity level remains intact. It also pointed to the regulator granting Paytm a Payment Aggregator (PA) licence in November 2025 as a signal of regulatory comfort.

“Although the tone of the order is severe, Paytm is legally ring-fenced,” the brokerage said, adding that concerns around management conduct at PPBL do not extend to the parent company.

Emkay remains positive on Paytm’s business outlook, citing strong growth potential in payments and financial services, along with optionalities such as BNPL, wallet expansion, and scaling of RuPay credit cards. It expects around 24% revenue CAGR over FY26–FY28.

The brokerage also highlighted Paytm’s strong liquidity position, with cash on books of about ₹12,900 crore, and said valuations remain attractive at 29.8x FY28E EV/EBITDA and 35.1x FY28E P/E.

Reiterating its stance, Emkay maintained a ‘Buy’ rating on the stock with a DCF-based target price of ₹1,500, stating confidence in Paytm’s execution in its core merchant payments and financial services business.

In an exchange filing, Paytm also reiterated that there will be no direct financial impact from the move, as the fintech major has no exposure to, or any material business arrangements with, PPBL. The payments bank is a joint venture between Vijay Shekhar Sharma, founder and CEO of Paytm, who holds a 51% stake, and One97 Communications Ltd, which owns the remaining 49%.

The company further reassured users and merchants that its platform will continue to operate without disruption. Its core offerings—including the Paytm app, UPI services, Paytm Gold, and merchant solutions such as QR codes, Soundbox devices, and card machines—remain fully functional. Other services, including its payment gateway and wealth management platform Paytm Money, will also continue as usual.