Updated March 15th, 2024 at 10:11 IST

Paytm shares surge 5% after securing third-party application provider licence

The strategic move comes on the heels of regulatory action resulting in the impending closure of its banking unit, Paytm Payments Bank, effective March 15.

Reported by: Business Desk
Paytm | Image:Paytm/Facebook
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Paytm shares surge: Paytm shares rose as much as 5 per cent to hit an intraday high of Rs 370.90 following the acquisition of a third-party application provider licence. The strategic move comes on the heels of regulatory action resulting in the impending closure of its banking unit, Paytm Payments Bank, effective March 15.

The license, issued by the country's payments authority, marks a key development for Paytm, allowing the platform to continue offering digital payment services post-banking unit shutdown. Paytm's shares rallied to Rs 370.70 early in the trading session, signalling its most promising performance in two weeks.

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Trading volume surged, making it the fourth busiest day for the stock this month, with over 4 million shares exchanged.

While Paytm has faced challenges in recent months, including a regulatory order halting fresh deposits in its accounts, the acquisition of the third-party app provider license signifies a significant stride forward. According to brokerage UBS, this move aligns Paytm with competitors such as Google Pay and PhonePe, shifting investor focus towards operational performance amidst regulatory turbulence.

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However, Jefferies cautioned that Paytm might need to utilize its substantial cash reserves of Rs 8,500 crore to retain its customer and merchant base. As the digital payments landscape in India continues to evolve.

As of 10:06 am, Paytm shares were locked in 5 per cent upper circuit with pending buy orders for 3,79,313 shares.
 

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Published March 15th, 2024 at 10:11 IST