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Paytm increases by 4% as PPBL reorganizes its board, and Macquarie keeps its “underperform” rating

<p>Paytm share price: Following the announcement of the business’s associate firm, Paytm Payments Bank (PPBL), reorganizing its board, shares of Paytm’s parent company rose by as much as 4% in early morning trading on Tuesday, February 27.</p>
<p><img decoding=”async” class=”alignnone wp-image-450101″ src=”×563.jpg” alt=” paytm increases by 4 as ppbl reorganizes its board and macquarie keeps its underpe” width=”994″ height=”746″ title=”Paytm increases by 4% as PPBL reorganizes its board, and Macquarie keeps its "underperform" rating 12″ srcset=”×563.jpg 750w,×768.jpg 1024w,×576.jpg 768w,×113.jpg 150w, 1200w” sizes=”(max-width: 994px) 100vw, 994px” /></p>
<p>The fintech startup said last night that the bank board has been restructured and that Vijay Shekhar Sharma has resigned from his role as Paytm Payments Bank Limited (PPBL) part-time non-executive chairman.</p>
<p>According to the company’s filing with the exchanges, PPBL reconstitutes the board: Retd. IAS Smt. Rajni Sekhri Sibal, former executive director of Bank of Baroda Shri Ashok Kumar Garg, former chairman of the Central Bank of India Shri Srinivasan Sridhar, and former executive director of the bank Shri Debendranath Sarangi joined.</p>
<p>The parent company of Paytm, One 97 Communications, said that it supports PPBL’s decision to remove its nomination and choose a board consisting only of executive and independent directors.</p>
<p>“PPBL has informed us that they will commence the process of appointing a new chairman,” said the filing.</p>
<p>The newly rebuilt board will oversee the company’s future operations.</p>
<p><strong>Following the most recent development, investors in Paytm may do the following</strong></p>
<p>The company has received a ‘underperform’ rating from global brokerage Macquarie, with a target price of Rs 275, which represents a 36% decline from the most recent trading price. The brokerage claimed that the apex bank will change its mind after Vijay Shekhar Sharma’s resignation from the PPBL board. Presently, Vijay Shekhar Sharma owns 51% of the shares of PPBL.</p>
<p>The firm said that it is unrealistic to expect the RBI to approve any related-party transactions between Paytm and PPBL. Sharma’s action implies that he is prepared to cede control of PPBL. Paytm’s profits will rise if PPBL is permitted to continue operating.</p>
<p>PPBL reported a combined profit of Rs 2.44 crore in its FY23 annual report.</p>
<p>Ambareesh Baliga, an independent market expert, believes that Vijay Shekhar Sharma’s resignation is a good thing. Although the disruption may be less than what the markets had anticipated when the news first surfaced, this doesn’t indicate that a fresh bull run in the stock has begun.</p>
<p>It’s just a reversal; we could see it peak at around Rs. 525 or Rs. 550. From there, it will depend on how quickly they can return to the road of development and normality in the context of the altered circumstances. Profitability has undoubtedly increased significantly,” the analyst said.</p>
<p>It should be mentioned that due to PPBL’s ongoing serious supervisory concerns and chronic non-compliance, the RBI has prohibited the bank from receiving deposits or credits from any client after March 15.</p>

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