📷 Image Credits: Moneycontrol
The shares of Paytm’s parent company One97 Communications have been on a bullish trend, hitting the upper circuit of 5% for the third consecutive session on May 31. The recent surge in the stock price follows a block deal involving 75.20 lakh shares, translating to a stake of 1.2% in the company, worth a total of Rs 296.30 crore. The transaction, executed at an average price of Rs 391 per share, represented a premium of 3.6% from the previous closing price of Rs 377.40 per share.
This positive momentum in Paytm’s stock can be attributed to various factors like the speculation surrounding a potential stake acquisition by Gautam Adani’s Adani Group. While initial reports stirred excitement in the market, both Paytm and Adani Group have dismissed these claims as mere speculations, clarifying that no discussions are currently ongoing.
Furthermore, the surge in trading volume and share price comes in the backdrop of regulatory developments and partnerships. The Reserve Bank of India (RBI) extended a deadline for Paytm Payments Bank (PPBL) to cease certain operations, allowing for a smoother transition for customers. Paytm recently collaborated with Axis Bank to ensure business continuity beyond the RBI’s stipulated deadline.
On the analyst front, brokerage firm Bernstein has maintained an ‘outperform’ rating for Paytm, with a target price of Rs 600 per share. This optimistic outlook is based on the belief that the regulatory actions primarily impact PPBL and do not have significant long-term consequences for Paytm’s overall business.
Despite some downward revisions from other brokerage firms like Jefferies and Macquarie, Paytm remains focused on operational changes and new partnerships to navigate through the regulatory landscape. The company’s ability to secure favorable terms with new partners could potentially unlock additional value for its stock in the future.
Overall, Paytm’s recent performance in the stock market reflects a mix of investor sentiment, regulatory compliance efforts, and strategic partnerships, positioning the company for potential growth in the coming days.
