Paytm's asset quality metrics remain steady, increase in number of lending partners to support steady growth in medium-term: Motilal Oswal

New Delhi [India], December 11 : Paytm recently announced that it plans to focus on higher-ticket size personal and merchant loans (Rs 3-7 lakh), as the demand in these loan segments remains strong.
The fintech giant announced that this would be targeted at lower-risk and high-creditworthy customers, in partnership with large banks and NBFCs.
During an analyst call, Paytm said that it continues to work with all of its lending partners and will soon onboard new partners as well.
"We are expanding our lender base. We are happy to inform you that we are adding two more NBFCs and one bank," Paytm management said.
The asset quality metrics of Paytm remain steady and the pick-up in high-ticket personal loans and merchant loans, along with the increase in the number of lending partners, should support steady growth in the medium term, said analysts at Motilal Oswal Financial Services, in a research note after the analyst call.
The brokerage firm maintained a 'buy' rating on the stock with a price target at Rs 1,025 per share.
Given the strong portfolio performance and widespread acceptance of loan distribution, Paytm is adding new forms of loan offerings with a focus on driving a healthy portfolio for lending partners.
The fintech giant, Paytm, expects robust growth in merchant loans and healthy growth in personal loans, aided by higher ticket size lending.
In an analyst call on loan distribution business, Paytm management said the company continues to build loan distribution business on the foundation of portfolio quality.
The management noted that proactive risk calibration (since Q3FY23) along with its lending partners, has been leading to better portfolio metrics.
Paytm's increased focus on cross-selling to existing loan users who have demonstrated good repayment behaviour -- is now contributing more than 60 per cent of new disbursements.