Paytm‘s share price extended its gaining streak to the third straight session on Tuesday morning going up over 4%.

What Happened: In a strategic move aimed at addressing ongoing regulatory challenges, Paytm CEO Vijay Shekhar Sharma announced his resignation as non-executive chairman and board member of Paytm Payments Bank on Monday. Sharma emphasized that his decision, coupled with the appointment of independent directors, is geared towards facilitating a seamless transition and bolstering governance frameworks.

This step is seen as an effort to distance Paytm from its payments bank arm, positioning the company as an autonomous entity. Talking about the move, brokerage house Macquarie said that the resignation is a bid to salvage value from Paytm Payments Bank. The analysts maintained their “underperform” rating for the stock with a target price of ₹275.

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The analysts added that founder Vijay Shekhar Sharma is signalling to regulators his willingness to relinquish control of the struggling entity. However, the analysts said that the future remains uncertain, with RBI unlikely to greenlight any further related-party transactions between Paytm and Paytm Bank.

Moreover, the brokerage said that recent revelations from lending partners indicate a growing apprehension, with some reconsidering their ties with Paytm. Such a scenario could significantly impact Paytm’s lending distribution business, which as per the brokerage is the fintech’s most profitable business.

Price Action: Paytm's share price was up 4.68% to trade at ₹448.15 as the markets opened on Tuesday.

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