 "Paytm")
Shares of One 97 Communications, the owner of Paytm, rose 10 per cent to hit the upper trading limit on Wednesday amid news reports that the chief executive of the embattled fintech company had met India's finance minister and Reserve Bank of India (RBI) officials to resolve a crackdown on its payments bank business.
Paytm's stock price ended the session at Rs 496.7. The stock is down 35 per cent since January 31, when the RBI asked the company’s payments bank division to stop accepting fresh deposits from March due to supervisory concerns and alleged non-compliance.
New reports said the company has asked the RBI to extend the February 29 deadline and sought clarity regarding the transfer of its licence from its wallet business and highway toll payment service.
Analysts said Paytm's stock may gain a bit from current levels, but the upside could be capped as they do not expect the firm to be absolved by the regulator.
"There is an expectation that the crackdown will be limited to the payments bank and not to other divisions of Paytm. There were also talks of third-party payment banks that will take over [Paytm’s wallet business]. The stock can bounce back a bit from here. But I don't see it going back to the level we saw in the last three months. Bouncing back after a steep fall is normal when such a news flow comes. Even if the company gets a clean chit, investors will have concerns about its governance issues," said Ambareesh Baliga, an independent equity analyst.
