Paytm stocks rise by 10%, extending a two-day surge to 13%.
Here’s the reason: The stock of One 97 Communications Ltd. (Paytm) rose by almost 10 percent in Wednesday’s trading session, resulting in a total gain of 13 percent over the past two days. This increase occurred following media reports that CEO Vijay Shekhar Sharma had a meeting with Finance Minister Nirmala Sitharaman and officials from the Reserve Bank of India (RBI) in response to the limitations imposed on Paytm Payments Bank.
The Paytm stock increased by 9.77% and reached a peak of Rs 495.75 on BSE. According to a media report, a total of 21 lakh Paytm shares worth Rs 103 crore, which represents 0.3 percent of the total equity, have been traded on the counter until now.
The rise resulted in a 13 percent increase in the Paytm stock throughout the two sessions. Paytm shares are still down by 34.85 percent from the Rs 761 level, at which they were traded when the RBI implemented tight measures.
In a revised statement, Bernstein reaffirmed its ‘Outperform’ rating on the stock with a target of Rs 600 per share, stating that the stock was approaching its lowest possible value. Although the regulatory steps will significantly influence how investors evaluate the risks associated with the business model, Bernstein anticipates that Paytm will effectively implement the necessary operational improvements to comply with RBI restrictions.
UBS recently stated that an important focus for Paytm management in the coming month would be to transfer client UPI handles of PPBL to another bank to reduce interruption. UBS stated that the RBI had previously granted a one-time exception and that not doing so again could lead to client turnover for Paytm.
A report from the Economic Times, however, citing individuals familiar with the situation, indicated that the Directorate of Enforcement (ED) is expected to commence a formal investigation into Paytm to examine the concerns raised in the reference from the Reserve Bank of India (RBI). Paytm previously refuted rumors that said the ED was investigating the firm, its affiliate Paytm Payments Bank, or its CEO.
It also refuted accusations of investigating or violating Foreign Exchange laws by Paytm or its subsidiary Paytm Payments Bank. The Paytm stock has had challenges after the RBI imposed restrictions on the operations of Paytm Payments Bank due to ongoing non-compliance and supervisory concerns.
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