Paytm shares up 5% again: What's fueling the rally
Paytm's stock saw another 5% boost today following the resignation of its founder, Vijay Shekhar Sharma, as chairperson and board member of crisis-hit Paytm Payments Bank Ltd (PPBL). Additionally, One 97 Communications Ltd., which operates Paytm, removed its nominee Bhavesh Gupta from PPBL's board as a director and board member. As per an exchange filing, PPBL's future business will be managed by a restructured board.
Paytm stock reaches highest value since February 8
Paytm shares reached Rs. 449.5 each in today's session, their highest value since February 8. However, at the time of writing, it dropped a little to Rs. 438.60, up 2.45% from yesterday. Following Sharma's ouster, Paytm stocks hit the upper circuit for the seventh time in eight days. The stock is recovering from its all-time low of Rs. 318.05 recorded on February 16. Paytm's market capitalisation is still 30% down as compared to its value on January 31.
Analysts' ratings and predictions for Paytm stock
Among the 14 analysts monitoring Paytm, Bloomberg data shows that six have given a 'buy' rating on the stock, three recommend 'hold,' and five suggest 'sell.' Their average 12-month price target indicates a potential upside of 57.7% for the company's shares. As Paytm undergoes changes in its leadership structure, investors and market observers will keep a close eye on how this affects its stock performance and future growth prospects.
Sharma's resignation to insulate PPBL from Paytm
In addition to relentless demands for Sharma's ouster from investors, the Paytm boss seemingly resigned to portray a dissociation of Paytm from its payments bank. Sharma owns 51% of the shares in the PPBL while One 97 Communications owns the remaining 49%. Sharma said that his resignation as chairperson and as a board member will pave the way for a smooth transition and smoothen governance.
Paytm faces RBI's wrath over persistent regulatory non-compliance
RBI curbed operations at PPBL after the fintech firm failed to comply with regulations despite repeated reminders over the years. The central bank found lapses in KYC records. In some cases, the same PAN card was used for multiple accounts with large deposits. This raised suspicions of alleged money laundering, which is being probed by the Enforcement Directorate (ED). In another investigation, ED recently found that Paytm was not violating foreign exchange rules.
