Paytm shares surged nearly 4 per cent after the troubled fintech firm announced the discontinuation of inter-company agreements with PPBL
Paytm's (OCL) shares saw a surge of nearly 4 per cent following the troubled fintech firm's announcement on Friday that the Board of Directors has approved the discontinuation of various inter-company agreements with its associate entity, Paytm Payments Bank Limited (PPBL).
The parent company, One97 Communications and PPBL have implemented additional measures aimed at strengthening its independent operational framework. As part of the process to reduce dependencies, Paytm and PPBL have mutually decided to terminate several inter-company agreements with Paytm and its affiliated entities.
At 10:00 am, the shares of One97 Communications Ltd. were trading at Rs 418 price level, up by 3.88 per cent on NSE.
The shareholders of PPBL have consented to simplify the Shareholders Agreement (SHA) to bolster PPBL's governance. On March 1, the Board of OCL approved the termination of agreements and amendment of SHA. Previously, Paytm had announced its intentions to sign up new partnerships with other banks and take measures to deliver seamless services for its customers and merchants.
"As informed earlier, One 97 Communications Limited and its services that include the Paytm app, Paytm QR, Paytm soundbox and Paytm Card machines will continue to work uninterrupted," the company said in its exchange filing.
This development comes at a time when the founder of the company, Vijay Shekhar Sharma, had to step down from his role as Chairman and board member of PPBL.
The troubled fintech firm's shares have plummeted by over 45 per cent following RBI's notice to its banking arm on January 30.