Paytm shares rise over 4%, hit upper circuits in last three trading sessions: Here are the key reasons behind this gain
Upstox
2 min read • Updated: March 20, 2024, 2:15 PM
Summary
Paytm shares are on the rise since March 14, gaining around 21% in the five-day rally even as broader markets witnessed a sharp correction during the period.
Shares of Paytm-owner One 97 Communications rallied more than 4% on Wednesday, March 20, extending the gains for the fifth straight day. The stock has bounced back in the last few sessions amid concerns over the continuity of its operations after the curbs imposed by the Reserve Bank of India.
The stock opened higher and rallied further 4.76% to hit a high of ₹425.7 per share on NSE in morning trades. Paytm shares are on the rise since March 14, gaining around 21% in the five-day rally even as broader markets witnessed a sharp correction during the period.
Paytm shares went into a spiral last month, hitting a record low of ₹318.05 per share on February 16, as the Reserve Bank imposed curbs on its wallet and payments bank operations due to alleged regulatory violations.
The RBI barred Paytm from taking deposits in the Paytm Payments Bank and top up its wallet from February 29 which the central bank later extended till March 15.
After the reconstitution of its board by February-end, Paytm got the National Payments Corporation of India’s (NPCI) approval to operate as a third-party application provider under the multi-bank model. YES Bank, HDFC Bank, Axis Bank, and State Bank of India are acting as Payment System Provider banks to Paytm, ensuring the continuity of most of its services except for wallet and Payment Bank.
YES Bank will act as a merchant acquiring bank for existing and new UPI merchants for Paytm. The @Paytm handle for UPI payments has been redirected to YES Bank. This has enabled existing users and merchants to continue to do UPI transactions and autopay mandates seamlessly.
As per experts, NPCI’s approval to participate in UPI that enabled Paytm to facilitate payments has helped ease investors' concerns.
Paytm also managed to reduce dependence on its wallet business and contained client loss due to bad press which could be positive for the company, as per experts.
The competitive DNA of Paytm and its increasing partner addition could also be another reason for positive sentiments around the stocks in the last few days.
Shares of One 97 Communications (Paytm) were trading 3.45% higher at ₹421.7 per share on NSE at 2:00 pm.