Shares of One97 Communications Ltd, which owns the Paytm brand, jumped 10 per cent to remain locked on the upper circuit on Wednesday as the mood improved following the meeting between finance minister Nirmala Sitharaman and founder Vijay Shekhar Sharma. The Paytm founder reportedly sought an extension of the February 29 compliance deadline for Paytm Payments Bank from the FM.
The rally, for the second consecutive session, also saw a large trade of 21 lakh shares or 0.3 per cent of its equity worth Rs 103 crore. However, the details of the buyer and seller remained unknown.
“Investors are getting some confidence from the fact that the CEO has met the regulators,” said Kranthi Bathini, equity strategist at WealthMills Securities, according to Reuters.
“While the main compliance issues remain and it is not clear how the company will handle the operational crisis going ahead, the stock has corrected a lot and that may be creating some buying opportunity,” Bathini added.
The Paytm stock vaulted 10 per cent to settle at Rs 496.75 after opening at Rs 461.30 on the BSE, against the previous close of Rs 451.60. In the last two days, market valuation rose Rs 3,720 crore to Rs 31,547.62 crore.
The stern action taken by the Reserve Bank of India (RBI) led to the stock sinking more than 42 per cent in three sessions, wiping out more than Rs 20,471 crore from market valuation.
However, even as investors dumped the stock, there have also been select purchases.
On February 2, Morgan Stanley Asia (Singapore) Pte bought 50 lakh shares at an average price of Rs 487.20 on the NSE for nearly Rs 244 crore, reportedly on behalf of buyers who did not have an FPI license in India
Last week, the RBI ordered Paytm Payments Bank Ltd, a restricted bank that can take deposits but cannot lend, to not take any further deposits or conduct credit transactions or carry out top-ups on any customers’ accounts, prepaid instruments, wallets, and cards for paying road tolls after February 29.
Sharma’s meeting with the finance minister on February 6 reportedly lasted for around 10 minutes, with the Paytm founder urging for a transition plan or extension of the February 29 deadline.
Sitharaman is understood to have told him to sort out the non-compliance aspects with the banking regulator.
RBI governor Shaktikanta Das may throw some light on the bar on the payments bank and the road ahead at the end of the three-day meeting of its rate-setting panel on Thursday. This comes amid speculations the RBI could cancel PPBL’s licence.
