Shares of India’s Paytm rose a stock exchange-allowed maximum of 5% on Friday, March 15, 2024, a day after it got a third-party application provider license that will allow it to offer digital payments after its banking unit ceases operations.

The license, granted by the country’s payments authority, came as Paytm Payments Bank will cease to operate on March 15, following regulatory action due to non-compliance with certain norms.

Paytm’s shares were up 5% at 370.70 rupees early in the session, set for its best day in two weeks, with its trading volume of over 4 million shares already making it the stock’s fourth busiest day this month.

Still, the stock has just over halved in value since late January when the Reserve Bank of India ordered Paytm Payments Bank to stop accepting fresh deposits in its accounts or popular wallets.

The third-party app provider license, brokerage UBS said in a note, means Paytm will operate like its competitors such as Google Pay and PhonePe, likely shifting investor focus to operational performance over regulatory headwinds.

However, Jefferies said that for Paytm to retain customers and merchants, it will have to dip into its cash reserves of 85 billion rupees ($1.02 billion).

Paytm, on February 9, announced setting up of a group advisory committee to advise the company on strengthening compliance and on regulatory matters.
| Photo Credit: The Hindu

Shares of Paytm owner One97 Communications jumped 5% in the morning trade on February 26 after Reserve Bank of India (RBI) asked retail payment settlement body NPCI to examine the possibility of migrating Paytm Payments Bank customers using ‘@paytm’ UPI handle to other banks.

The stock of crisis-hit fintech company climbed 5% each to ₹428.10 and ₹427.95 apiece — also its upper circuit limit — on the NSE and BSE.

In the morning trade, the 30-share BSE Sensex benchmark slumped 288.71 points or 0.39%, while NSE Nifty fell 71.55 points to 22,141.15. On February 23, the scrip of One97 Communications rallied 5% and locked in upper circuit limit on the BSE.

In a bid to prevent any disruptions in the payment ecosystem, the RBI on Friday asked the National Payments Corporation of India (NPCI) to examine the possibility of migrating Paytm Payments Bank customers using the UPI handle ‘@paytm’ to four to five other banks.

The Central bank came out with additional steps for the benefit of customers, wallet holders and merchants who are availing banking services from Paytm Payments Bank, which has been barred from accepting deposits and credits after March 15, 2024.

“As the PPBL cannot accept further credits into its customer accounts and wallets after March 15, 2024, certain additional steps have become necessary to ensure seamless digital payments by UPI customers using ‘@paytm’ handle operated by the bank, and minimise concentration risk in the UPI system by having multiple payment app providers,” the RBI said in a statement.

“NPCI has been advised by the RBI to examine the request of One97 Communication Limted (OCL) to become a Third-Party Application Provider (TPAP) for UPI channel for continued UPI operation of the Paytm app, as per the norms,” it said.

Meanwhile, an advisory committee, set up by One97 Communications after the Reserve Bank’s action on its payments bank business, is at a stage of engagement with the company on matters related to the terms of reference for the panel.

The panel’s head and former chairman of Securities and Exchange Board of India M. Damodaran on February 25 said, “We have been engaging with the group on matters relating to the Advisory Committee’s terms of reference.” He said that the panel members are external advisors and at present Paytm is engaged in dealing with the RBI.

On January 31, the RBI asked PPBL (Paytm Payments Bank Limited) to stop further deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and National Common Mobility Cards, after February 29. Later, the Central bank extended the deadline till March 15.

Paytm on February 9 announced setting up of a group advisory committee headed by Damodaran. The committee was set up to advise the company on strengthening compliance and on regulatory matters. One97 Communications Ltd (OCL) holds a 49% stake in PPBL.

The Paytm scrip has rebounded since Friday and gained more than 21% from Thursday’s closing level of ₹325
| Photo Credit: Reuters

Shares of One97 Communications which owns Paytm brand hit the upper circuit for the fourth consecutive session on February 21.

The stock of the fintech major climbed 5% each to ₹395.25 and ₹395.05 per piece — its upper circuit limit — on the BSE and NSE, respectively.

In the morning session, the 30-share BSE Sensex gained 27.95 points or 0.04% to 73,085.35, while Nifty of the NSE slipped 15.75 points to 22,181.20.

The Paytm scrip has rebounded since Friday and gained more than 21% from Thursday’s closing level of ₹325.

The rally in shares of One97 Communication came amid reports that the Directorate of Enforcement (ED), which has been probing crisis-hit fintech company’s arm Paytm Payments Bank Ltd (PPBL), has not found any breaches of the foreign exchange rules so far.

However, the central agency has found certain lapses in Know-Your-Customer (KYC) norms as well as issues around generation of suspicious transaction report.

Last week, ED had initiated a probe into overseas transactions by PPBL for allegedly flouting foreign exchange rules.

Shares of One97 Communications surged 5% on Tuesday, a day after hitting the upper circuit limit on Monday.

On Friday, shares of Paytm rebounded after three consecutive days of fall amid the company coming under the regulatory scanner for various violations related to its payments bank business.

One97 Communication stock has taken a beating on the exchanges this month after the Reserve Bank of India’s (RBI) action against the company’s arm PPBL.

As per the January 31 order, the RBI asked PPBL to stop further deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and National Common Mobility Cards, after February 29. Later, the central bank extended the deadline till March 15.

One97 Communications holds a 49 per cent stake in PPBL but classifies it as an associate of the company and not as a subsidiary.

File picture of the Bombay Stock Exchange (BSE) in Mumbai. Image for representation
| Photo Credit: SHASHI ASHIWAL

Benchmark indices Sensex and Nifty fell in early trade on Tuesday as volatility persisted amid mixed trends in global markets.

The 30-share BSE Sensex opened on a positive note and climbed 116.42 points to 71,188.91 points. However, it soon took a U-turn and fell 129.92 points to 70,942.57 points.

Showing a similar trend, the broader Nifty rose 14.80 points to 21,630.85 points initially but lost ground and declined 63.25 points to 21,552.80 points.

In the Sensex pack, Tata Steel, JSW Steel, PoweGrid and Wipro were among the major losers while ICICI Bank, NTPC, ITC and Kotak Bank were trading in the green.

BSE smallcap index fell 1.65%, midcap index dropped 0.57% and largecap index slipped 0.12%.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said midcap and smallcap stocks are likely to see a sharp fall as many such scrips are excessively valued.

“Correction will give opportunities to buy fairly valued stocks in this segment like PSU banks,” he noted.

In Asia, Tokyo’s Nikkei 225 and China’s Shanghai Composite were trading in the positive territory while Hong Kong’s Hang Seng was in the red.

European markets ended Monday’s session in the green with CAC 40 of France and DAX of Germany rising 0.55% and 0.65% respectively.

On Monday, the US market ended on a mixed note.

Global oil benchmark Brent crude rose 0.09% to $82.07 a barrel on Tuesday.

On Monday, Sensex settled 523 points or 0.73% lower at 71,072.49 points while the Nifty closed 166.45 points or 0.76% down at 21,616.05 points.

Foreign Institutional Investors (FIIs) were net buyers on Monday as they bought equities worth ₹126.60 crore, according to exchange data.

Paytm shares plummet

Shares of payments firm Paytm dropped 8.5% to a record low of ₹386.25 on Tuesday after brokerage Macquarie downgraded the stock, citing the “serious risk of exodus of customers” following the Indian central bank’s action against its banking arm.

Moving customers from Paytm Payments Bank to other banks by the February 29 deadline set by the Reserve Bank of India is “an arduous task,” as it would require customers to submit Know Your Customer (KYC) details again, Macquarie added.

Lending partners are re-evaluating their relationship with Paytm, which could potentially lead to a decline in lending business revenue if partners scale down or terminate their collaboration with Paytm, the note said.

The Reserve Bank of India’s January 31 order directing a wind-down of Paytm’s banking arm has resulted in the stock plummeting more than 49% and has eroded nearly $2.9 billion of shareholder wealth.

The RBI will not review its recent regulatory action taken against Paytm Payments Bank, Governor Shaktikanta Das

Shares of One97 Communications Ltd, which owns Paytm brand, climbed 10 per cent on Wednesday, February 7 morning, continuing its recovery journey.

The stock jumped 9.99 per cent to Rs 496.75 on the BSE after a firm beginning.

Shares of the company climbed 9.99 per cent to Rs 496.25 on the NSE.

Earlier, Vijay Shekhar Sharma, founder and CEO of One97 Communications, met Finance Minister Nirmala Sitharaman in the presence of top Department of Financial Services officials, amid the crisis engulfing Paytm Payment Bank’s operation

He was told in no uncertain terms by Ministry representatives that the bank needs to comply with Reserve Bank of India (RBI) directives and regulations. The government has no role to play in the matter that entails the central bank asking Paytm Payment Bank to suspend acceptance of deposits after February 29, it was conveyed to Mr. Sharma, sources in the know said.

The stock of One97 Communications Ltd rebounded by over 3 per cent on Tuesday after three days of sharp fall.

From February 1-5 (three days of trading), the company’s stock tumbled over 42 per cent, wiping out Rs 20,471.25 crore from its market valuation, following the RBI’s crackdown.

Last week, 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.

Paytm Payments Bank Limited (PPBL) is an associate of One97 Communications Limited (OCL).

One97 Communications holds 49 per cent of the paid-up share capital (directly and through its subsidiary) of PPBL. Founder Vijay Shekhar Sharma has a 51 per cent stake in the bank.