Paytm Stock Surges 5%; Hits Upper Circuit For Second Consecutive Day
Despite previous reports, One97 Communications Ltd clarified on Wednesday that it is not engaged in discussions to sell a stake to the Adani Group
Shares of One97 Communications, Paytm's parent company, surged by 5 per cent on Thursday, reaching their upper circuit limit for the second consecutive session. This uptick came amid reports suggesting discussions between Adani and Paytm regarding a potential stake acquisition in the fintech company.
Despite previous reports, One97 Communications Ltd clarified on Wednesday that it is not engaged in discussions to sell a stake to the Adani Group. Similarly, the Adani Group dismissed these reports as "false and untrue." Nevertheless, the stock surged by 4.99 per cent, hitting its upper circuit limit of Rs 377.40 on the NSE and Rs 377.50 on the BSE.
As of the end of March, Paytm founder Vijay Shekhar Sharma personally holds a 9.1 per cent stake in Paytm and an additional 10.3 per cent through Resilient Asset Management, a foreign entity. Following the closure of its banking unit due to regulatory issues, Paytm's market value has plummeted by about half, sparking ongoing speculation about its potential as a takeover target.
In February, reports were circulating that Paytm was engaged in discussions with billionaire Mukesh Ambani's Jio Financial Services. However, both entities subsequently denied the existence of any such talks.
Recently, Paytm disclosed a significant widening of its loss in the fourth quarter of the financial year 2023-24 to Rs 550 crore. This deterioration was attributed to the ban imposed by the Reserve Bank of India (RBI) on transactions associated with its payments bank.
With the welfare of customers, including merchants, in mind, the RBI implemented restrictions on Paytm Payments Bank Limited (PPBL) from March 15 onwards, prohibiting it from accepting deposits, credit transactions, or top-ups in any customer accounts, wallets, and FASTags.
During the reported quarter, the company decided to write off a Rs 227 crore investment, representing a 39 per cent stake in PPBL. This move was prompted by concerns over the future uncertainties surrounding the bank's business operations, including potential regulatory developments. It's noteworthy that Sharma retains a 51 per cent stake in PPBL.
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