SUMMARY
The stock has gained 10% in the last two trading sessions
This comes after Paytm has shifted the nodal account by way of opening an escrow account to Axis Bank
In a regulatory filing with the bourses, the fintech major said on Friday that the new arrangement has been executed by opening an escrow account
Shares of One 97 Communications Ltd, the parent company of Paytm, jumped 5% to hit its upper circuit limit of INR 376.45 during Tuesday’s (February 20) trading session.
The stock has gained 10% in the last two trading sessions. This comes after Paytm has shifted the nodal account by way of opening an escrow account to Axis Bank.
In a regulatory filing with the bourses, the fintech major said on Friday that the new arrangement has been executed by opening an escrow account with the private bank to ensure merchant settlements continue without a hitch.
Moreover, the Reserve Bank of India on Friday provided more clarity to its clampdown on the payments bank by releasing frequently asked questions (FAQs) on the issue and extending the deadline on the business restrictions to March 15 from February 29 earlier.
“No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc. after March 15, 2024 (extended from the earlier stipulated timeline of February 29, 2024)…,” said the central bank.
Over the past few weeks, the shares of One97 Communications have experienced significant volatility, with the stock price plummeting by more than 50% since January 31.
The Shares were trading at INR 376.45 apiece.
The RBI on January 31 issued a notification barring Paytm Payments Bank from any deposits or credit transactions, or top-ups in any of its customer accounts. The central bank also stopped the company from providing any banking services including UPI facility and fund transfers after February 29.
Since then, several brokerages have downgraded Paytm shares, citing concerns about the regulatory turmoil and its potential negative effects on the company’s customer base and overall revenue.
Brokerage Macquarie recently downgraded One97 Communications to ‘underperform’ from an earlier ‘neutral’ rating and lowered its price target (PT) to INR 275 from INR 650.
