Paytm rallies 4% on board nod to snap inter-company pacts with Payments Bank

Shares of Paytm gained over 4 percent on March 1 after the fintech’s board gave its approval for the discontinuation of several inter-company agreements with its associate entity, Paytm Payments Bank Limited (PPBL).

At 9:21am, Paytm shares were trading nearly 4 percent higher at Rs 418.50 on the National Stock Exchange (NSE). So far this year, the stock has tanked around 35 percent. In comparison, Nifty has risen nearly 2 percent during this period.

In a regulatory filing, Paytm informed that the company and its associate PPBL have introduced ‘additional measures to strengthen their approach towards independent operations of PPBL.’

“As part of this process to reduce dependencies, Paytm and PPBL have mutually agreed to discontinue various inter-company agreements with Paytm and its group entities. Further, the shareholders of PPBL have agreed to simplify the Shareholders Agreement (SHA) to support PPBL’s governance, independent of its shareholders,” Paytm said.

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The board of Paytm parent One 97 Communications Limited has approved the termination of agreements and amendment of SHA on March 1, 2024. The Vijay Shekhar Sharma-led company had earlier announced that it would sign up new partnerships with other banks and take measures to provide services for its customers and merchants.

Paytm took a hit when the RBI on January 31 cracked down on Payment Payments Bank. In its intimation to stock exchanges on February 1, Paytm indicated the possible financial impact.

It, however, said that One 97 Communications Limited and its services including the Paytm app, Paytm QR, Paytm soundbox and Paytm Card machines will continue to work uninterrupted.

Also Read | Paytm, PPBL mutually agree to discontinue various inter-company agreements

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