Paytm's Third Consecutive Gain: Shares Spike 8.6% to ₹414

Paytm's parent company, One97 Communications, stock price saw a significant rise of 8.7%, reaching a day's high of Rs 414, which could be impacted because of the announcement of employee layoffs as part of the company's restructuring efforts.

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Regulatory Challenges and Stock Performance

Paytm has been under investigation since the start of the year due to regulatory issues. In February, the Reserve Bank of India (RBI) prohibited Paytm Payments Bank Ltd from accepting new deposits, citing "persistent non-compliances." This has had an impact on the company's stock performance, which has dropped by 51% over the past year. Despite this, the stock has seen a 13% rise this month, although it has fallen approximately 39% since the beginning of the year.

Company Statement on Layoffs

On Monday, Paytm announced that it is offering outplacement support to the affected employees to assist with their transition. The exact number of employees impacted by the layoffs has not been disclosed. “One97 Communications Limited (OCL) is providing outplacement support to employees who have resigned as part of the restructuring efforts by the company,” Paytm stated.

Employee Stock Option Plan

Friday evening, Paytm revealed that it had approved the allotment of equity shares under its Employee Stock Option Plan 2019. The company stated, “The Board of the Company ('Committee'), on June 7, 2024, at 6:42 p.m. (IST) through circulation, approved the allotment of 2,00,162 equity shares having a face value of ₹1 each, as fully paid-up, to eligible employees, upon exercise of vested options under Employee Stock Option Plan 2019,” according to its filing with the exchanges.

Market Movement and Future Prospects

Paytm shares experienced a significant surge and hit the upper circuit on Friday due to heavy trading volumes, following an increase in the circuit filter from 5% to 10%. There is also speculation that Paytm might be among the 78 stocks that could enter the Futures & Options (F&O) list, as the market regulator considers revising the criteria for the entry and exit of stocks in the derivatives market.

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