Emkay Global Highlights Paytm’s Ring-Fenced Structure Protecting Core Business From PPBL Fallout

The RBI’s cancellation of PPBL’s licence raised concerns about Paytm’s future, but both the company and analysts have clarified that the impact is minimal. Paytm’s parent entity, One97 Communications Ltd, had already impaired its investment in PPBL in March 2024, and all commercial agreements were terminated well before the regulatory action.

Emkay Global’s Assessment

Emkay Global described the licence cancellation as “largely a formality”, noting that PPBL had been in effective run-down since February 2024 when fresh deposits were barred. The brokerage highlighted that Paytm is “legally ring-fenced” from the payments bank, ensuring no spillover risks to its listed entity.

Emkay also pointed to the RBI granting Paytm a Payment Aggregator licence in November 2025, signaling regulatory comfort with its core business. The brokerage expects Paytm to deliver a 24% revenue CAGR between FY26–FY28, supported by growth in merchant payments, BNPL (Buy Now Pay Later), wallet expansion, and RuPay credit card scaling. 

Paytm’s Clarification

Paytm reiterated in its exchange filings that it has no exposure or material business arrangements with PPBL, stressing that the payments bank operates independently with no board or management involvement from One97 Communications.

The company assured users and merchants that all services—including Paytm app, UPI, QR codes, Soundbox, card machines, Paytm Money, and payment gateway solutions—remain fully operational. This separation ensures that the RBI’s action does not disrupt Paytm’s ecosystem. 

Market And Financial Outlook

Despite the regulatory action, Paytm maintains a strong liquidity position with ₹12,900 crore cash reserves. Emkay Global has reaffirmed its ‘Buy’ rating on Paytm stock, setting a DCF-based target price of ₹1,500, citing attractive valuations at 29.8x FY28E EV/EBITDA and 35.1x FY28E P/E. 

Key Highlights

• RBI cancelled PPBL licence effective April 24, 2026
• Paytm’s core business remains unaffected, legally ring-fenced from PPBL
• All commercial agreements with PPBL ended in March 2024; investment fully impaired
• Paytm services including UPI, QR, Soundbox, and Paytm Money continue uninterrupted
• Emkay Global expects 24% revenue CAGR FY26–FY28, maintains ‘Buy’ rating with ₹1,500 target price
• Paytm holds strong liquidity with ₹12,900 crore cash reserves

Sources: Fortune India, Business Today, The Economic Times, ET BFSI