Paytm Shares Gain After Resubmission Of Application For Payment Aggregator Licence

Shares of Paytm operator One97 Communications Ltd. surged nearly 5% on Thursday as it initiated moves to resubmit its payment aggregator licence after receiving a nod from the Government of India.

The Finance Ministry approved downstream investment into Paytm Payments Services Ltd. on Tuesday, according to an exchange filing.

With this clearance, Paytm Payments Services can now apply for the licence with the Reserve Bank of India. The subsidiary has been operating under restrictions since March 2023.

NDTV Profit had reported that the operator of Paytm, had received government approval to apply for a payment aggregator licence. People in the know had told NDTV Profit that the nod came after the government was assured that the funds in Paytm Payments Services accounts are from the group's own sources and not from foreign funding.

Paytm's stock rose as much as 4.98% during the day. It pared gains to trade 2.63% higher at Rs 552.1 apiece, compared to a 0.06% advance in the benchmark Nifty 50 as of 09:26 a.m.

The scrip has declined 35% during the last 12 months and 13% year-to-date. The relative strength index was at 60.

Five out of the 18 analysts tracking the company have a 'buy' rating on the stock, six suggest a 'hold' and seven have a 'sell', according to Bloomberg data. The average of 12-month analysts' price targets implies a potential downside of 11.6%.