On March 1, 2024, the board of One 97 Communications Limited, the parent company of Paytm, greenlit the termination of existing agreements and the modification of its Shareholder Agreement (SHA).
On March 1, 2024, Paytm’s shares experienced a notable increase of over 4 percent following the announcement of the fintech company’s board approval to discontinue multiple inter-company agreements with its affiliate, Paytm Payments Bank Limited (PPBL).
Paytm shares saw a notable uptick of nearly 4 percent at 9:21 am on March 1, 2024, reaching Rs 418.50 on the National Stock Exchange (NSE). However, despite this positive movement, the stock has been grappling with a substantial 35 percent decline since the start of the year. In contrast, the Nifty index has managed a modest 2 percent rise over the same period.
In a regulatory disclosure, Paytm revealed that the company, in conjunction with its associate PPBL, has taken proactive steps to fortify the independent operations of PPBL.
“As part of our strategic endeavors to mitigate dependencies, Paytm and PPBL have jointly decided to discontinue several inter-company agreements with Paytm and its affiliated entities. Moreover, PPBL’s shareholders have unanimously agreed to streamline the Shareholders Agreement (SHA) to bolster PPBL’s governance, irrespective of its shareholders,” stated Paytm in the regulatory filing.
On March 1, 2024, the board of directors at One 97 Communications Limited, the parent company of Paytm, gave the green light to terminate existing agreements and modify the Shareholder Agreement (SHA). This move, led by Vijay Shekhar Sharma, comes amidst the company’s proactive strategy to explore new partnerships with banks and enhance services for both customers and merchants.
The fintech giant Paytm faced a setback following the RBI’s crackdown on Paytm Payments Bank on January 31, 2024, which prompted Paytm to disclose potential financial implications in its notification to stock exchanges on February 1.
Despite these challenges, One 97 Communications Limited reassured stakeholders that its flagship services, including the Paytm app, Paytm QR, Paytm soundbox, and Paytm Card machines, will remain operational without any disruptions.
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