Shares of Paytm hit back-to-back upper circuit; gains 10 per cent in two trading sessions; here's why

After falling over 50 per cent in a month; shares of One97 Communications, the parent company of Paytm rose ten per cent in two sessions.

Shares of Paytm surged by 5 per cent for the second consecutive session, reaching the upper limit as the company, facing challenges, announced a collaboration with Axis Bank for merchant payment settlements. 

The stock was trading at Rs 358.35 on the NSE, after closing the previous session at a 5 per cent upper circuit of Rs 341.30. Over the past month, the stock has experienced a 55 per cent decline.

Regarding the partnership with Axis Bank, One97 Communications, the parent company of Paytm, has transitioned its nodal account to Axis Bank via an escrow account, ensuring continued operations for its merchant partners.

Another reason for the surge in shares was that the Reserve Bank of India (RBI) has postponed the deadline for suspending operations and for the account holders of Paytm Payments Bank to transfer their assets until March 15. The RBI also released a set of frequently asked questions (FAQs) for Paytm Payments Bank account holders, providing clarity on issues such as remaining balances, UPI payments, and FASTags.

The RBI's directive specifies, “No further deposits or credit transactions or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc. after March 15, 2024 (extended from the earlier stipulated timeline of February 29, 2024), other than any interest, cashback, sweep in from partner banks or refunds which may be credited anytime."