For the third consecutive session, Paytm shares surge by 5%
- ByStartupStory | February 20, 2024
After enduring its worst downfall since going public, shares of One 97 Communications, the parent company of Paytm, have recently shown significant upward momentum, consistently hitting upper circuit limits in recent trading sessions. In today’s trading, the stock was locked at a 5% upper circuit limit at ₹376 apiece, marking the third consecutive day of a 5% rally, with a total gain of 16% over these three days.
According to sources, “This resumption in buying interest can be attributed to several factors,” including the RBI extending the deadline and positive comments from management. Recent developments, such as the Enforcement Directorate (ED) finding no violation under the Foreign Exchange Management Act and a deal with Axis Bank, have also contributed to the rally.
Regarding the RBI’s decision to extend the deadline, “The RBI on Friday (February 16) gave 15 days more till March 15, 2024, to Paytm Payments Bank (PPBL) to stop deposits, credit transactions or top-ups in any customer accounts, wallets, and FASTags.”
In addition to the RBI extension, “The company announced the shift of its nodal account to Axis Bank,” a move aimed at alleviating concerns regarding potential suspensions of merchant payments. Vijay Shekhar Sharma, founder and managing director of Paytm, emphasized, “Paytm QR, Soundbox, and EDC (card systems) will continue to function even after March 15,” referring to a document released by the RBI.
Brokerage firm Bernstein assigned an ‘outperform’ rating to Paytm, with a target price of ₹600 per share, highlighting that the RBI’s actions primarily target Paytm Payments Bank (PPBL), with no intention to disrupt other integral functions. On the other hand, global brokerage firm Macquarie downgraded the stock’s rating to ‘Underperform,’ citing a sharp reduction in revenues across various segments.
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