Paytm Shares Booms by 9%, After CEO Vijay Shekhar Meets Finance Minister Niramala Sitharaman & RBI
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Summary: Paytm’s parent company One 97 Communications shares skyrockets by 9% after the meetup between Ceo Vijay Shekhar and Finance Minister Niramala Sitharaman
Stocks of Paytm’s parent company One 97 communication surges by 9% after the CEO Vijay Shekhar met with the finance minister Nirmala Sithraman and RBI (Reserve Bank of India). This at least gave some relief to its investors.
Earlier paytm’s stocks were priced at ₹492.45, then it dropped to ₹461.30, while the previous day showed ₹451.60. After the sudden fall of their share, Paytm has bounced back with 7.79 percent and opened at ₹475.20 and ended at ₹451.60.
This comes after the RBI refused to grant concession to Vijay shekhar’s fintech firm.
Paytm was allegedly accused of offering all kinds of banking services for non-compliance. It was accused of being involved in money laundering cases and violation of KYC (thousands of customer documents are missing).
Read: Jio Financial Planning to Buy Paytm? Look What JFSL Has to Say About This
Since RBI has refused to grant any concession, due to which Paytm will now have to migrate its accounts to other bank accounts, a huge setback for Paytm. Before the deadline Paytm will have to move its payment bank accounts to the third party accounts so that the payment interface works perfectly.
Avinash Gorakshakar, research head at Profitmart Securities, told the Reuters that this jump in shares could be a “dead-cat bounce” since there are still negative rumors circulating among the investors and people. He hinted that there still might be a drop in the shares.
While Bernstein, the brokerage firm decreased its share price from ₹950 to ₹600 and possessed an outperform rating. The Bernstein analyst said, “While the regulatory action will definitely have a lasting effect on investors' assessment of the business model risk and of the management's ability to overcome regulatory risk, we are expecting the company will successfully execute the operational changes required to overcome the restrictions."
