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Paytm Shares Surge Amid Reports of CEO’s Meetings with Govt Officials

New Delhi, February 7, 2024 – Paytm shares soared by as much as 10% on Wednesday following reports that the digital payments firm’s CEO had held discussions with Finance Minister Nirmala Sitharaman and the Reserve Bank of India (RBI) to address regulatory concerns surrounding its payments bank business.

The Paytm shares climbed as high as 496.25 rupees, although they remained significantly below their pre-January 31 levels. This rise comes after the RBI directed Paytm Payments Bank to halt accepting new deposits and cease operations of its popular digital wallets starting March, citing supervisory concerns and non-compliance with regulations.

Tuesday’s gains were bolstered by reports of ongoing discussions between Paytm officials and government and central bank representatives. A source familiar with the matter stated, “Discussions are on about addressing the regulatory concerns and compliance issues with both the RBI and the ministry.”

Paytm has reportedly requested an extension of the February 29 deadline from the RBI and seeks clarity on the transfer of its license for its wallets business and digital toll payment service FASTag.

Kranthi Bathini, equity strategist at WealthMills Securities, commented, “Investors are gaining confidence from the CEO’s engagement with regulators,” acknowledging that while compliance issues persist, the recent stock correction may present buying opportunities.

Despite the surge, Paytm shares remain approximately 24% below the median price target of 650 rupees set by 14 analysts, according to LSEG data. Pranav Gundlapalle, senior analyst at Bernstein, highlighted the importance of ensuring a smooth transition for customers and merchants amid any operational changes, emphasizing the significance of Paytm’s payment operations and the need for efforts to mitigate any potential disruptions.

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