One97 Communications Ltd., the operator of Paytm, has received approval from the government to apply for a payment aggregator license, according to people with knowledge about the matter.
With this approval, Paytm's subsidiary, Paytm Payment Services, can apply for the license with the Reserve Bank of India as its business has faced restrictions since March 2023, these people told NDTV Profit on the condition of anonymity.
The nod comes after the government has been assured that the funds in Paytm Payments Services accounts are from the group's own sources and not from foreign funding. This was a point of contention for the RBI, which had asked Paytm to get the government to certify the source of these funds.
In lieu of this, the regulator had barred Paytm Payments Services from acquiring new customers, in March 2023.
Earlier this year, the RBI also clamped down on Paytm Payments Bank, another firm that was earlier linked to Paytm. The full financial impact of this action was seen in the company's Q1 earnings, with net loss and Ebitda loss widening, according to the company.
Shares of One 97 Communication Ltd. hit a 10% upper circuit and rose to Rs 505.05 apiece, the highest level since Feb. 8. It remained locked in the upper circuit as of 2:46 p.m. This compares to a 1.64% advance in the NSE Nifty 50 Index.
The stock has declined 35.42% in the last 12 months and 19.89% on a year-to-date basis. Total traded volume so far today was 1.9 times its 30-day average. The relative strength index was at 71.22.
Out of 17 analysts tracking the company, four maintain a 'buy' rating, six recommend a 'hold,' and seven suggest a'sell', according to Bloomberg data. The average 12-month consensus price target implies a downside of 14.1%.
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