Shares of One97 Communications Limited hit a 5% lower circuit during the early trading session on Thursday (February 29), falling from the previous close of INR 406.15 on Tuesday to INR 385.5
As of Wednesday at 1:05 pm, Paytm stock was trading at INR 388.6 on BSE
The fall comes after Vijay Shekhar Sharma resigned as part-time non-executive chairman and board member of Paytm Payments Bank (PPBL) earlier this week
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Shares of One97 Communications Limited, the parent entity of Paytm, hit a 5% lower circuit during the early trading session on Thursday (February 29), falling from the previous close of INR 406.15 on Tuesday to INR 385.5.
As of Wednesday at 1:05 pm, Paytm stock was trading at INR 388.6 on BSE.
The fall comes after Vijay Shekhar Sharma resigned as part-time non-executive chairman and board member of Paytm Payments Bank (PPBL) earlier this week.
Sharma stepped down from the board of Paytm Payments Bank on Monday (February 26). In a filing with the bourses, the fintech startup also mentioned that a newly reconstituted board will now oversee the affairs at the company.
Meanwhile, foreign brokerage firm UBS has revised down the target price for the fintech giant from INR 650 to INR 510. In its Wednesday note, UBS expressed expectations of near-term financial challenges for Paytm, anticipating both short-term and potentially lasting business impacts for FY25.
“We expect Paytm to increase its marketing spend to win back lost customers, resulting in elevated EBITDA losses in FY25,” UBS analysts said.
Following the RBI’s imposition of stringent restrictions on Paytm Payments Bank after January 31, Paytm’s stock experienced a downturn. The RBI directive, issued after January 31, imposed restrictions on Paytm Payments Bank, barring it from conducting several transactions, including deposits, credit transactions, and the use of the UPI facility, effective after February 29.
However, now the central bank has set a March 15 deadline for the payments bank to stop all deposits or credit transactions or top-ups in any of its customer accounts. It has also barred the payments bank from offering other banking services, such as UPI facility and fund transfers post March 15.
Meanwhile, Prashant Kumar, the MD and CEO of Yes Bank, has expressed the bank’s interest in acquiring the merchant accounts of the payments bank. He stated that such an acquisition would present a substantial opportunity for Yes Bank. However, Kumar emphasized that this process would necessitate Yes Bank to conduct Know Your Customer (KYC) verification and thorough due diligence.
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