Shares of One97 Communications, the parent entity of digital payment app Paytm, tumbled in today’s trade, hitting the lower circuit limit of 20%, reaching ₹650.45 apiece. This sharp fall came after the company announced plans to cut down on small ticket loans amid regulatory changes.

According to analysts, the company’s decision to shift focus away from small ticket-size Buy Now, Pay Later (BNPL) loans will have a significant impact on its overall loan originations through the platform, given that this segment constitutes over 50% of total disbursements.

On the back of recent macro development and regulatory guidance, in consultation with lending partners, in line with its continued focus on driving a healthy portfolio, the company has recalibrated the portfolio origination of less than ₹50,000, which is prominently the postpaid loan product and will now be a smaller part of its loan distribution business going forward,” the company said in an exchange filing on Wednesday.

However, Paytm affirmed that merchant loans will remain a focal point. Since these loans are provided for business purposes to small merchants, they remain unaffected by recent regulatory guidance.

The company is now shifting its focus to higher-ticket personal and merchant loans, targeting lower-risk and high-credit-worthy customers through collaborations with major banks and NBFCs.

A Paytm spokesperson said, “As the lending distribution business is maturing, we see newer opportunities of expansion to offer high-value personal and merchant loans. We will continue to focus on originating the high portfolio quality for our lending