The stock of Paytm’s parent company, One97 Communications, experienced a notable surge of nine percent, providing a welcomed relief to investors. This surge came in the wake of a meeting between Paytm’s founder, Vijay Shekhar Sharma, and both the Reserve Bank of India (RBI) and Finance Minister Nirmala Sitharaman.
At the opening bell, Paytm’s stock was trading at ₹492.45, marking a significant increase of 9.05 percent as of 9:43 am. The stock had opened at ₹461.30, surpassing the previous day’s close of ₹451.60.
The positive momentum follows a rebound in Paytm shares on Tuesday after three consecutive days of sharp decline. Despite a weak opening, the stock soared by 7.79 percent to ₹472.50 on the Sensex during the day’s trading session. Ultimately, it closed at ₹451.60 apiece, reflecting a gain of 3.02 percent. Similarly, on the NSE, Paytm shares climbed 7.99 percent to ₹473.55 during the trading day, ending at ₹452.80 each, up 3.26 percent.
The recent surge comes amidst the central bank’s decision not to grant concessions to Paytm concerning its Payments Bank operations, including the migration of accounts to other banks or extending the February 29 deadline.
This development poses a challenge for Paytm, as it now needs to migrate Payments Bank accounts to third-party banks before the deadline to ensure seamless functioning of the payments interface.
Avinash Gorakshakar, head of research at Profitmart Securities, suggested that the stock’s movement could be a “dead-cat bounce” following the recent downturn, highlighting lingering negative sentiments surrounding the stock.
Meanwhile, brokerage firm Bernstein lowered its target share price for Paytm from 950 rupees to 600 rupees but maintained an outperform rating. Despite regulatory actions affecting investor sentiment, Bernstein analysts expressed confidence in Paytm’s ability to navigate operational changes and regulatory challenges successfully.
