Paytm plunged as much as 20 per cent in early trade on Thursday, a day after the digital payments firm said it will issue fewer sub-₹50,000 (about $600) personal loans after the central bank tightened rules on consumer lending.

Shares of the company posted their biggest intraday percentage fall since listing two years ago.

The non-bank lender said on Wednesday it will expand its portfolio of high-ticket personal and commercial loans to lower-risk and high-credit-worthy customers.

Paytm's plans to give out more higher ticket loans would not fully offset a scale back of smaller-ticket loans, analysts at Goldman Sachs said in a note, while downgrading the stock to a 'neutral' from 'buy' and lowering the price target to ₹840 from ₹1,250.

The company's lending growth, a core driver of Paytm’s profitability, is anticipated to decelerate, while payments, commerce and cloud momentum would remain strong, the analysts said.

Goldman Sachs now expects Paytm's net income to turn positive in fiscal year 2025-26, a year later than previously expected, owing to slow revenue growth.

Paytm was last trading 17.2 per cent lower at ₹673.15 rupees as of 9.35 a.m. IST.