After the Indian central bank gave Paytm’s banking division more time to shut down and the company teamed up with Axis Bank to try to keep some of its well-liked products running, the company’s shares increased 5% on Monday.
The stock reached 358.35 rupees, the upper trading limit.
The Reserve Bank of India (RBI) on Friday gave Paytm Payments Bank until March 15 instead of February 29 to cease taking new deposits into its wallets or accounts.
The deadline extension, according to Bernstein analysts, will allow for a “smooth transition” for the transfer of Paytm Payments Bank accounts. As part of its efforts to address the current crisis, Paytm also signed up Axis Bank as a new banking partner on Friday in an effort to maintain some of its well-liked products.
Brokerage Citi stated in a note that despite keeping its “Sell” rating and 550 rupee price target on the stock, the company is likely to pursue more of these partnerships because it sees them as “significant positives for ongoing business.”
Bernstein, on the other hand, called it a “huge plus” that merchants can use Paytm QR codes, soundboxes, and card machines as long as they are connected to bank accounts other than Paytm Payments.
Since the RBI’s order against Paytm Payments Bank on January 31, which was brought about by what the central bank officials described as persistent non-compliance with regulations, Paytm shares have dropped 53%. The stock market meltdown has reduced the wealth of shareholders by 255.74 billion rupees ($3.08 billion).
Based on LSEG data, analysts generally assign a “Hold” rating to Paytm. It has been at least a year since there have been five “Sell” or “Strong sell” recommendations for the stock. $1 is equal to 82.9880 Indian rupees. (Reporting from Bengaluru by Nandan Mandayam; editing from Rashmi Aich and Sonia Cheema)
