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Paytm shares jumped 5% today; stock up 41% from Feb 16 low; here's why

Paytm shares jumped 5% today; stock up 41% from Feb 16 low; here's why

The Paytm stock hit its 5 per cent circuit limit at Rs 449.30 on BSE. With this, the stock has risen 41 per cent from a low of Rs 318.35 hit on February 16.

Paytm shares jumped 5% today; stock up 41% from Feb 16 low; here's why Paytm shares jumped 5% today; stock up 41% from Feb 16 low; here's why

One 97 Communications Ltd (Paytm) on Tuesday saw its shares rising 5 per cent for the third straight session after the fintech giant said its founder Vijay Shekhar Sharma stepped down as non-executive chairman of Paytm Payments Bank (PPBL) to aid the payments bank in the transition. The Paytm stock hit its 5 per cent circuit limit at Rs 449.30 on BSE. That said, the scrip soon slipped into the red. The stock was, however, trading 0.57 per cent lower at Rs 425.50 as the session progressed, after foreign brokerage Macquarie maintained its 'underperform' call on the sock, with a target of Rs 275.   

In a filing to BSE, Paytm said PPBL's future business would be led by a reconstituted board, which would be led by ex-Central Bank of India Chairman Srinivasan Sridhar, retired IAS Debendranath Sarangi, former Executive Director of Bank of Baroda Shri Ashok Kumar Garg, and retired IAS Rajni Sekhri Sibal. The stock has risen 33 per cent from a low of Rs 318.35 hit on February 16.

Macquarie reportedly said Sharma was trying to salvage some value from PPBL and by stepping down from the board he was sending a message to the RBI that he is willing to give up control of PPBL. Macquarie said the RBI may have to offer some relaxation to PPBL in order to ensure its survival but the broking firm does not expect the central bank to authorize any related party transactions between Paytm and PBBL in the future, ET NOW reported.  

“OCL supports PPBL’s move of opting for a board with only independent and executive directors by removing its nominee. The Company has been separately informed that Vijay Shekhar Sharma has also resigned from the Board of Paytm Payments Bank to enable this transition. PPBL has informed us that they will commence the process of appointing

 a new Chairman,” Paytm said in a BSE filing.

The central bank last week asked the National Payments Corporation of India (NPCI) to evaluate a request from Paytm to become a third party application provider. This came after the RBI stopped PPBL from taking any fresh deposits or credit transactions or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and NCMC cards.

 

A Reuters report suggested that Paytm is likely to partner with HDFC Bank, YES Bank, State Bank of India (SBI) and Axis Bank for processing of transactions via the unified payments interface (UPI). Another report last week suggested that HDFC Bank and YES Bank had applied for the third-party application provider (TPAP) with the NPCI for running the mobile payments platform Unified Payments Interface (UPI).

 

Also read: Stock recommendations by analyst for February 27: IRCON, JSW Energy and HUDCO

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Feb 27, 2024, 9:43 AM IST
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