- Shares of Paytm surged by 5 per cent for the second consecutive session on May 30.
- The rally followed reports that billionaire Gautam Adani is contemplating acquiring a stake in Paytm’s parent company, One97 Communications.
- Paytm later clarified that the report was purely speculative, stating that the company is not engaged in any discussions in this regard.
Paytm shares jump 5% amid acquisition rumors, but company denies speculation.
Paytm Shares Surge Amid Acquisition Rumors
Shares of Paytm saw a significant rally, surging by 5 per cent for the second consecutive session on May 30. The stock closed at ₹377.40 per share on Thursday. This surge followed reports that billionaire Gautam Adani is considering acquiring a stake in Paytm’s parent company, One97 Communications. However, Paytm later clarified that these reports were speculative and that the company is not engaged in any discussions regarding such an acquisition.
Clarifications from Paytm and Adani Group
In response to the reports, Paytm issued a statement clarifying that the news was speculative. “We hereby clarify that the above-mentioned news item is speculative and the company is not engaged in any discussions in this regard. We have always made and will continue to make disclosures in compliance with our obligations under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,” the company stated. Similarly, the Adani Group also issued a clarification, categorically denying the speculation and labeling it as baseless and untrue.
Background of the Rumors
The rumors originated from a Times of India (TOI) report, which claimed that Paytm founder and CEO Vijay Shekhar Sharma had met with Adani Group chairman Gautam Adani in Ahmedabad. According to the report, the two business leaders discussed “finalizing the contours of a deal,” citing unnamed sources. This news follows a report by the Financial Times, stating that the Adani Group is planning to enter India’s fintech sector, positioning itself as a competitor to Alphabet’s Google Pay, Walmart’s PhonePe, and Reliance Industries’ Jio Financials.
Impact on Paytm’s Stock Performance
Despite the clarifications, the rumors had a noticeable impact on Paytm’s stock performance. Year-to-date, Paytm’s stock has dropped by 41 per cent, and over the past 12 months, it has fallen by 46 per cent. The recent surge in stock price provides a temporary respite for investors, but the long-term outlook remains uncertain, especially given the regulatory challenges faced by Paytm Payments Bank Ltd (PPBL) from the Reserve Bank of India (RBI).
Conclusion
In conclusion, while the rumors of Gautam Adani acquiring a stake in Paytm have sparked investor interest and led to a temporary surge in the stock price, both Paytm and the Adani Group have categorically denied these speculations. Investors should remain cautious and stay updated with official disclosures from the companies involved. The long-term performance of Paytm’s stock will likely depend on its ability to navigate regulatory challenges and maintain its competitive edge in the fintech sector.
