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Paytm shares jump 13% after freefall, still at 72% discount to issue price

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Paytm shares jump 13% after freefall, still at 72% discount to issue price

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Paytm shares, jumped almost 13 percent on Thursday, a day after the company issued a clarification to the stock exchanges on its shares hitting a series of lows. This is the biggest gain for Paytm in four months on the back of higher volumes. In the past month, the stock has wiped off more than 24 percent of investors’ wealth.

Paytm shares jump 13% after freefall, still at 72% discount to issue price
The stock of One97 Communications, Paytm’s parent firm, jumped almost 13 percent on Thursday, a day after the company issued a clarification to the stock exchanges on its shares hitting a series of lows in the recent past.
At 12:52 pm, Paytm shares were trading at Rs 575.95, up 9.83 percent from their previous close, on the BSE. During the day, the stock surged to an intraday high of Rs 592.40.
This is the biggest gain for Paytm in four months on the back of higher volumes. In the past month, the stock has wiped off more than 24 percent of investors’ wealth.
On Wednesday, the digital payments company informed the exchanges that it has from time to time, made all necessary disclosures to the stock exchanges within the stipulated timeline and that there is no information that may have a bearing on the price/ volume behaviour in the scrip that not yet been disclosed.
“The Company would also like to point out the business fundamentals remain robust as demonstrated in our last earnings release dated February 04, 2022,” the new-age company said in a regulatory filing.
The statement was issued after the BSE on Tuesday sought clarification from One97 Communications on significant movement in its stock price in a bid to safeguard investors' interest.
Meanwhile, last week Macquarie Securities India’s Suresh Ganapathy, one of the most bearish analysts on Paytm- slashed its price target on the stock to Rs 450. The stock was quoted at Rs 587.50 on BSE.
The remark came after the Reserve Bank of India (RBI) barred Paytm Payments Bank - the payments bank unit of the company - from taking on new customers. The banking regulator has also ordered a comprehensive audit of its IT systems. RBI cited “material” supervisory concerns observed in One97 Communications’ payments bank, without elaborating.
Macquarie believes Paytm will face more headwinds on the regulatory side because of impending regulations from the RBI on digital payments, buy-now-pay-later, stricter know-your-customer and compliance norms.
Paytm said it was taking immediate steps to comply with RBI directions and assured that the ban will not have a material impact on its overall business.
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