Paytm shares surged 10% on Friday after the fintech company received government approval to invest in its payments arm.
What Happened: The Indian government has approved Paytm’s proposed investment of ₹50 crore in its payments division, reported Reuters. The approval was delayed for months due to the company’s link to China. This will enable the unit to continue normal business service.
Paytm Payments Service made up one-fourth of the company’s consolidated revenue in FY23.
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India’s Financial Services Secretary Vivek Joshi said the company can now approach the Reserve Bank of India to apply for a payment aggregator license.
In its June quarter results, Paytm reported a 135% decline in its net profit to ₹838.9 crore. Its revenue fell 36% to ₹1501 crore in the April-June period from ₹2,341 crore in Q1 2024. The fintech company’s shares have been in turmoil since the RBI restricted the company’s payments bank business and wallets.
Price Action: Shares of Paytm rose 9.99% to hit an upper circuit at ₹509.05 on Friday after the announcement came.
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