The Paytm share price surged by 5% to reach ₹358.55 in opening trades on Monday, February 19, following the announcement on Friday by its parent company One97 Communications that Paytm has moved its nodal account to Axis Bank (by opening an escrow account).
Merchants will be able to continue accepting digital payments using the Paytm card machine or QR code with a change to the nodal account setup.
Additionally, the Reserve Bank of India declared on Friday that the original deadline of February 29 for Paytm Payments Bank would now be extended till March 15. A few limitations that were put in place on January 31 are covered by this extension.
The deadline for terminating deposit transactions at Paytm Payments Bank, a division of One 97 Communications, which operates the digital payments company Paytm, was extended by the Reserve Bank of India (RBI) on Friday by 15 days. Clients can now deposit funds into their accounts, wallets, FASTags, and prepaid cards through March 15th.
In the meantime, Paytm has been given a “outperform” rating by brokerage company Bernstein, with a target price of ₹600 per share.
However, after the RBI took action against Paytm Payments Bank this month, the stock has been under intense selling pressure. With the stock now trading at ₹358.55, it has lost 53% of its value thus far in February.
Pending a slowdown in the news surrounding One 97 Communications, Jefferies Financial Group Inc. has become the first significant international brokerage to discontinue coverage of the company, according to a Bloomberg article.
“Without a banking license, Paytm’s business model will now become similar to pure payment service providers. Paytm’s focus will now move to ensuring customer retention, and we believe it will dip into its 85 billion rupees ($1 billion) cash reserves for spends on retaining users,” market analysts Jayant Kharote and Prakhar Sharma mentioned in a February 18 statement, as quoted by Bloomberg.
