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Updated February 27th, 2024 at 13:02 IST

Paytm shares fall 8% from day’s high on Vijay Shekhar Sharma’s exit, board rejig

As of 9:39 am, shares were trading 1.60% lower at Rs 421.10 per share.

Reported by: Tanmay Tiwary
Paytm stock price
Paytm stock price | Image:Republic
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Paytm falls 8% from day’s high: Shares of the payments aggregator Paytm dropped nearly 8 per cent from day’s high, to Rs 413.55 per share, after Vijay Shekhar Sharma stepped down as the non-executive chairman and board member of the payments bank unit. The company also announced board restructuring plans.  

Notably, the stock rose sharply in early trading, surging 5 per cent to an intraday high of Rs 449.30 per share. 

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The move indicates Vijay Shekhar Sharma's willingness to relinquish control of Paytm Payments Bank in response to regulatory concerns, according to a report by brokerage firm Macquarie. 

Macquarie also anticipates that the RBI will likely disallow any further related-party transactions between Paytm and Paytm Payments Bank.

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Should Paytm Payments Bank be permitted to resume operations, it could potentially enhance Paytm's profitability, Macquarie said in a note. 

The brokerage firm maintained an 'underperform' rating on Paytm, setting a target price of Rs 275 per share.

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On January 31, the Reserve Bank of India (RBI) imposed major restrictions on Paytm Payments Bank, barring it from accepting new deposits and conducting credit transactions beyond March 15.

Board rejig

The restructured board now includes individuals such as ex-RBI Chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former Executive Director of Bank of Baroda Ashok Kumar Garg, and retired IAS officer Rajni Sekhri Sibal, who have joined as Independent Directors.

The move underscores Paytm Payments Bank's commitment to governance and compliance, as they opt for a board comprising only independent and executive directors, removing any potential conflicts of interest.

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However, the departure of Vijay Shekhar Sharma from the board marks a crucial transition for the company, with Paytm Payments Bank initiating the process of appointing a new Chairman to guide its future trajectory.

On the appointments, Surinder Chawla, MD & CEO at Paytm Payments Bank said, "We welcome the appointment of Srinivasan Sridhar, Debendranath Sarangi, Ashok Kumar Garg, and Rajni Sekhri Sibal to our Board, marking a significant step forward in PPBL's journey. Their distinguished expertise will be pivotal in guiding us toward enhancing our governance structures and operational standards, further solidifying our dedication to compliance and best practices.”

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Overall, the restructuring of the board signals Paytm's proactive approach towards governance and regulatory compliance, setting the stage for continued growth and stability in the evolving fintech landscape.

As of 10:11 am, shares of Paytm were trading 0.82 per cent higher at Rs 431.45 per share.

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Published February 27th, 2024 at 09:51 IST

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