Paytm shares in the green after govt nod for downstream investment in payments services arm

The stock opened in the green at ₹559 apiece on the National Stock Exchange (NSE), and shortly after the opening bell, it peaked to ₹564.8. This was up 4.9% as against the last closing price.

However, much of the gains were pared as the trading progressed in the first hour. By 9:59 am, the shares retreated to ₹548.3 apiece on the NSE, but were still up 1.91% as against the preceding session's close.

The uptick in Paytm shares comes in the aftermath of the Finance Ministry granting permission to the company for "downstream investment" in its wholly-owned subsidiary Paytm Payments Services Limited (PPSL).

"We would like to inform you that PPSL has received approval from the Government of India, Ministry of Finance, Department of Financial Services, vide its letter dated August 27, 2024, for downstream investment from the Company into PPSL," One 97 Communications said in a regulatory filing on Wednesday.

Paytm seeks PA licence

Paytm, whose lending arm -- Paytm Payments Bank Ltd (PPBL) -- faced a regulatory crackdown earlier this year, is now seeking a payments aggregator (PA) licence from the government.

With the approval for downstream investment in place, "PPSL will proceed to resubmit its PA application", Paytm informed the bourses.

In the meantime, PPSL will continue to provide online payment aggregation services to existing partners, it added.

Paytm, in its exchange filing, further noted that it is "committed to a compliance-first approach" and upholding the highest regulatory standards. "As a homegrown Indian company, Paytm is focused on contributing to and advancing the Indian financial ecosystem," it stated.