While the Vijay Shekhar Sharma-led fintech isn’t yet out of the woods, the freefall in shares of Paytm finally seems to have found a bottom after 3 days of non-stop selling that eroded Rs 20,500 crore worth of investor wealth. After Bernstein screamed buy the dip, the stock rallied 5% today to the day’s high of Rs 459 on BSE.

The global brokerage firm took a brave and contra call on the troubled new-age stock to give an outperform rating with a target price of Rs 600, saying that following the sharp decline in the last few days, the stock is once again back at near doomsday valuations.

“We would lean towards the ‘buy now’ camp. We see a healthy upside in our very conservative base-case scenario,” Bernstein said in a note.

Regulatory action will no doubt have a lasting impact on investors’ assessment of the business model risk and of the management’s ability to handle regulatory risk, it said, while expecting Paytm to successfully execute the operational changes required to overcome the restrictions.

After RBI imposed a ban on Paytm Payments Bank from offering all kinds of banking services for non-compliance, the regulator is now said to be considering cancelling the banking licence as well on possible money laundering and know-your-customer (KYC) violations at Paytm.

The company has also denied a media report which said Paytm is considering selling the wallet business. Suitors include Mukesh Ambani’s Jio Financial and HDFC Bank.Also Read | Jio Financial denies being in talks to acquire Paytm wallet”We have not been in any negotiations in this regard. We have been informed by Paytm Payments Bank Limited, our associate company, that they also have not been in any negotiations in this regard,” One 97 Communications, which runs Paytm, said in an exchange filing.

Dalal Street veteran Sanjiv Bhasin said he is a silent spectator like most others and waiting for more news or clarity on the Paytm fiasco.

“I cannot comment till the RBI gives more clarification because it is not just Paytm’s KYC and other norms, it will be the whole ecosystem.

About 62% of Paytm is still owned by FIIs, so there should be some more clarity on where we stand and whether the business retains. They will give them more time, but I think this is all in the domain of the RBI, so it will be difficult for us to comment,” Bhasin said.

Paytm crisis has left 11 lakh retail investors trapped. Besides, December quarter shareholding pattern shows that there were over 500 FIIs and 97 mutual fund schemes invested in Paytm.

Analysts have warned retail investors against catching the falling knife till the regulatory trouble settles down.

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