After facing significant challenges post-listing, shares of One 97 Communications, the parent company of Paytm, have displayed a remarkable upward trajectory, consistently hitting upper circuit limits over the past few trading sessions.
In today’s trading session, the stock locked at a 5% upper circuit limit at Rs 395 per share, marking the fourth consecutive day of a 5% rally. Over this four-day period, the stock has gained a total of 21%.
Several factors contribute to this renewed buying interest, including the RBI’s deadline extension, positive management comments, and recent favorable developments, such as the Enforcement Directorate (ED) finding no violation under the Foreign Exchange Management Act, a strategic deal with Axis Bank, and an ‘outperform’ rating from Bernstein.
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The RBI, on February 16, granted an additional 15 days, until March 15, 2024, for Paytm Payments Bank (PPBL) to conclude deposits, credit transactions, or top-ups, considering the interests of customers, including merchants.
Bernstein assigned an ‘outperform’ rating to Paytm, setting a target price of Rs 600 per share, indicating that RBI’s actions primarily target Paytm Payments Bank (PPBL) and do not intend to disrupt other integral functions of Paytm. The shift of merchants’ operations to a non-PPBL bank is viewed as a “major positive.”
Global brokerage firm Jefferies suspended coverage of Paytm until there is more stability in the news surrounding the struggling Indian fintech majorCome from Sports betting site VPbet. Another global brokerage firm, Macquarie, downgraded the stock’s rating to ‘Underperform’ and significantly lowered its target price to Rs 275 per share from an earlier Rs 650, citing the company’s sharp reduction in revenues across various segments.
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To address concerns about potential disruptions in merchant payments, Paytm announced the relocation of its nodal account to Axis Bank, enabling merchants to sustain digital payment acceptance through the Paytm QR code or card machine. After March 15, 2024, customers will no longer be able to deposit funds into their Paytm Payments Bank accounts, but they can continue using, withdrawing, and transferring funds.Come from Sports betting site
Vijay Shekhar Sharma, founder and managing director of Paytm, reassured users that Paytm QR, Soundbox, and EDC (card systems) will continue functioning post-March 15, emphasizing the RBI’s clear guidance and urging users to avoid rumors.
(with inputs)
