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Paytm shares surge by 10% day after CEO Vijay Shekhar Sharma's meeting with FM Nirmala Sitharaman, RBI
Paytm share price: Paytm parent company One97 Communication's stock rose nine per cent, providing relief to the investors
Paytm share price rose by 10 per cent, providing relief to the investors day after the fintech firm's founder Vijay Shekhar Sharma met the Reserve Bank of India and finance minister Nirmala Sitharaman.
At 12:27 pm, the shares of Paytm were trading at ₹496 after opening at ₹461 in the opening.
The Paytm stock was trading at ₹492.45, up by 9.05 per cent in early trade at 9:43 am. The stock had closed at ₹451.60 on Tuesday.
On Tuesday, the Paytm shares had bounded back after three days of sharp fall. The stock had jumped by 7.79 per cent to ₹472.50 during the day on the Sensex despite a weak opening. The stock price ended at ₹451.60 apiece, reflecting a gain of 3.02 per cent.
Shares of Paytm climbed 7.99 per cent to ₹473.55 during the day on the NSE and ended at ₹452.80 each, up 3.26 per cent.
This comes on a day after the central bank refused to grant any concessions to the fintech firm in connection with the Payments Bank, which included the migration of accounts to other banks or extending the February 29 deadline.
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The central bank's refusal is indeed a setback to Paytm as it will now need to migrate the Payments Bank accounts to third party banks well before the deadline to ensure that the payments interface functions smoothly.
Avinash Gorakshakar, head of research at Profitmart Securities, told Reuters the share move could be a "dead-cat bounce" after the recent rout, pointing to the amount of negative news still overhanging the stock.
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On the other hand, brokerage firm Bernstein lowered its target share price to 600 rupees from 950 rupees, but retained an outperform rating.
"While the regulatory action will no doubt have a lasting impact on investors' assessment of the business model risk and of the management's ability to handle regulatory risk, we expect the company to successfully execute the operational changes required to overcome the restrictions," Bernstein analysts said.
