Paytm share price climbs 5% on strong trading volume
Shares of One 97 Communications Ltd (Paytm) surged 5.34% on Tuesday, closing at Rs 700.70 on the BSE despite a broader market downturn.
The stock hit a high of Rs 700 on the NSE, with an impressive turnover of Rs 427.60 crore and over 62.26 lakh shares changing hands. The upswing came after Paytm announced that its nomination and remuneration committee approved the grant of 109,995 stock options to eligible employees under the One 97 Employees Stock Option Scheme 2019 (ESOP 2019), reports Business Today.
The company also noted the lapse of 411,931 stock options. Paytm described these amendments as performance-linked rewards aimed at fostering long-term value creation and aligning with industry practices.
FEMA Probe and Alleged Contraventions
Despite the stock’s positive momentum, Paytm remains under scrutiny following a Rs 611.17 crore show cause notice from India’s Directorate of Enforcement. The notice relates to alleged violations of the Foreign Exchange Management Act (FEMA), 1999, tied to investment transactions between 2015 and 2019.
These transactions involved the acquisition of subsidiaries Little Internet Private Limited (LIPL) and Nearbuy India Private Limited (NIPL), formerly Groupon India.
Paytm emphasized that the alleged contraventions predate the companies’ acquisition and asserted that the issue does not impact its current services for consumers and merchants, which remain fully operational.
Business Strategy and Market Position
Paytm continues to focus on expanding its payments business and upselling financial services. The company processes Rs 5 lakh crore in gross merchandise value (GMV) every quarter, with 80% of transactions occurring through the Unified Payments Interface (UPI) and the remaining 20% through credit cards. UPI’s rising dominance has notably reduced debit card usage.
In the offline segment, Paytm holds a 90% market share in payment sound boxes and a 10% share in card machines. The company generates revenue from bank transactions and government incentives, earning approximately $1 per merchant per month from its sound box service.
Additionally, Burberry’s third-quarter trading statement revealed stronger-than-expected results, leading to a more than 15% jump in its share price.
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