The NASDAQ Paytm’s stock went higher by 5% on Friday. The Reserve Bank of India (RBI) is waving the green flag for the shareholder-friendly proposal made by the corporation.
This development takes place after the bank’s non-compliance with the RBI directive, which finally led to the termination of its operations. By its name, we can quote “Paytm Payments Bank” (“Paytm” means “money” in the Hindi language).
In its new arrangement, Paytm will serve as a gateway for the retail customers of major banks, such as Axis Bank, HDFC Bank, SBI, and Yes Bank, through its multi-bank model. Changes to @Paytm will be applied only to new payments while existing users and merchants will be offered smooth continuity as the “@Paytm” handle will be redirected to YES Bank.
Paytm’s shares got 35% and 25% shareholding, respectively, with Alibaba and Ant Financial. Shares of Paytm experienced a 35% surge at the start of the trading session, reaching 370.70 rupees, which was its most noteworthy gain in two weeks. But the stock has been going down since the start of February as a measure by Paytm Payments Bank, which did not accept new deposits, has put downward pressure on its value.
UBS & Jeffries’ consultants wrote that the license Paytm has received qualifies them as third-party app providers &therefore, will help them in providing insurance solutions. UBS has pointed out that Paytm will now be just like its rivals, such as Google Pay and PhonePe, because of the UPI-route-based transactions initiated. Paytm’s reserves of 825 billion Indian rupees ($1.02 billion) were the issue that got the attention of Jefferies, who consequently suggested that the money holds could be utilized to retain both customers and merchants instead.
NPCI’s approval becomes the bulwark of international brokers’ confidence, and thus, Paytm’s obstacles to growth from the regulatory angle are demolished. While this holds true for the buyer base and the expected prolonged effects of the current workflow for the lending sector, nonetheless
In spite of those challenges, Jefferies indicates a better future as the payment value is expected to rise while the number of downloads will also stay at the normal level. Pension Plan proposes that Paytm, after the takeover and making its transition into a cash reservoir about an era where exclusively payments will be taken care of, might use it for retention purposes.
Speaking about the consequences of Paytm, which has been registered as a third-party UPI service provider by NPCI, we can observe the company’s share price has brought with it the chance to become the key way to make easy digital payments in conjunction with major banks. However, as numerous challenges arise, optimistic analysts still present Paytm’s promising perspectives.
