August 29, 2024
New Delhi, India
Paytm Shares
Paytm, through its parent company One 97 Communications, is set to reapply for a payments aggregator (PA) licence from the government after receiving approval for downstream investment into its payments arm, Paytm Payments Services Limited (PPSL). This move comes after regulatory challenges faced by its lending unit, Paytm Payments Bank Ltd (PPBL), earlier this year.
Stock Market Reaction: Following the announcement, shares of One 97 Communications rose on August 29, 2024. The stock opened at ₹559 on the National Stock Exchange (NSE) and peaked at ₹564.8 shortly after the opening bell, marking a 4.9% gain from the previous close. However, as the trading session progressed, gains were partially pared, and by 9:59 AM, the shares settled at ₹548.3, still up 1.91% from the last session.
Downstream Investment Approval: The uptick in Paytm’s share price follows the Finance Ministry’s green light for Paytm to invest in its wholly-owned subsidiary, PPSL. According to a regulatory filing, “PPSL has received approval from the Government of India, Ministry of Finance, Department of Financial Services, for downstream investment from the Company into PPSL.” This approval marks a key step toward Paytm’s aim to expand its financial services portfolio.
Payments Aggregator Licence Resubmission: With the approval now in place, PPSL plans to resubmit its PA application. Paytm had previously faced regulatory scrutiny, but the latest move is seen as an effort to solidify its position in India’s financial services landscape. Meanwhile, PPSL will continue to provide online payment aggregation services to its existing partners, maintaining its market presence while awaiting the PA licence.
Commitment to Compliance: In its filing, Paytm reiterated its commitment to maintaining the highest regulatory standards, emphasizing a compliance-first approach. “As a homegrown Indian company, Paytm is focused on contributing to and advancing the Indian financial ecosystem,” the company stated. This message underscores Paytm’s ongoing efforts to align with regulatory expectations while driving growth in India’s burgeoning digital payments sector.
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