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  5. Paytm parent firm One97 Communications jumps 8%; what is the trigger?

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Paytm parent firm One97 Communications jumps 8%; what is the trigger?

Upstox
By Upstox News Desk

3 min read | Updated on September 10, 2024, 12:21 IST

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SUMMARY

Shares of One97 Communications, the parent firm of fintech firm Paytm, jumped as much as 8% to ₹678.50 apiece in the early trade on Tuesday, September 10.

Stock list

PAYTM
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Last month, the Vijay Shekhar Sharma-led company announced that Zomato will acquire Paytm's entertainment ticketing business

Last month, the Vijay Shekhar Sharma-led company announced that Zomato will acquire Paytm's entertainment ticketing business

Paytm share price: Shares of One97 Communications, the parent firm of fintech firm Paytm, jumped as much as 8% to ₹678.50 apiece in the early trade on Tuesday, September 10. The exact reason behind the sharp upmove in the stock was not clear; however, the surge could be attributed to the fact that the GST Council did not make any announcements as regards GST on UPI transactions below ₹2,000. 

Last month, the Vijay Shekhar Sharma-led company announced that the online food delivery platform Zomato will acquire Paytm's entertainment ticketing business for ₹2,048 crore to strengthen its "going-out" segment in a deal that will help the troubled fintech firm to sharpen its focus on core payments and financial services distribution.

Paytm's entertainment ticketing business covers movies, sports, and events (live performances). The boards of Zomato and One 97 Communications Ltd (OCL) have approved the all-cash deal.

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As part of this agreement, One97 Communications' entertainment ticketing business will transfer business to its 100% subsidiaries Orbgen Technologies Pvt Ltd (OTPL) and Wasteland Entertainment Pvt Ltd (WEPL), followed by the sale of 100% stake in these subsidiaries (which operate the TicketNew and Insider platforms) to Zomato.

Subsequently, Zomato will spin off the new business into a new app called 'District'. READ MORE

Paytm shares took a heavy beating earlier this year after the Reserve Bank of India (RBI) in February barred Paytm Payments Bank (PPBL) from accepting new deposits from March 15 and ruled out any review of its action against the company. PPBL is an associate of One97 Communications Limited. 

The action against PPBL followed a comprehensive system audit report and subsequent compliance validation report of external auditors, RBI added.

The stock hit a 52-week low of ₹310 in May 2024. Since then, the stock has more than doubled on the bourses.

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Last month, Paytm received the government's approval for downstream investment in wholly-owned subsidiary Paytm Payments Services Ltd. The company will reapply for a payment aggregator (PA) licence, a regulatory filing said on Wednesday.

Paytm Q1 FY25 Results

One97 Communications' loss widened to ₹840 crore in the quarter ended June 30, 2024. The company had posted a loss of ₹358.4 crore in the same period a year ago, according to a regulatory filing by the company. The consolidated revenue of Paytm declined 33.48% to ₹1,639.1 crore during the reported quarter, from ₹2,464.2 crore logged in the same period a year ago.

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