Paytm Jumps 4% After It Discontinues Inter-Company Agreements With PPBL

Shares of One 97 Communications, the parent company of Paytm, rose 4% to INR 423 apiece on Friday (March 1).

Paytm shares opened at INR 413.55 on Friday, as compared to INR 405.2 at the previous close. The shares were trading in red for the last three consecutive sessions.

The rise comes after Paytm said that it has mutually agreed to discontinue various inter-company agreements with its payments bank unit Paytm Payments Bank Limited (PPBL).

“One 97 Communications Ltd (Paytm) would like to inform that the company and its associate entity, Paytm Payments Bank Limited (PPBL), have introduced additional measures to strengthen their approach towards independent operations of PPBL,” it said in an exchange filing.

As part of this process to reduce dependencies, Paytm and PPBL have mutually agreed to discontinue various inter-company agreements with Paytm and its group entities.

Further, the shareholders of PPBL have agreed to simplify the Shareholders Agreement (SHA) to support PPBL’s governance, independent of its shareholders. The Board of OCL approved the termination of agreements and amendment of SHA on March 1, 2024.

“One 97 Communications Limited and its services that include the Paytm app, Paytm QR, Paytm soundbox and Paytm Card machines will continue to work uninterrupted,” Paytm said.

Earlier this week, Paytm founder and chief executive officer (CEO) Vijay Shekhar Sharma stepped down from the board of Paytm Payments Bank as the part-time non-executive chairman and board member of the payments bank. It also said that a newly-reconstituted board will now helm the affairs at the company.

The new appointments include former Central Bank of India chairman Srinivasan Sridhar, retired IAS officers Debendranath Sarangi and Rajni Sekhri Sibal, and Bank of Baroda’s ex-executive director Ashok Kumar Garg.

Paytm shares were trading at INR 421.85 apiece at 1:15 pm on Friday.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.