Paytm app is seen on a smartphone.
Credit: Reuters Photo
New Delhi: Shares of fintech firm One97 Communications -- the owner of Paytm brand -- jumped 5 per cent on Thursday morning after the company received the government's approval for downstream investment in wholly-owned subsidiary Paytm Payments Services Ltd.
The stock climbed 5 per cent to Rs 565 on the BSE.
At the NSE, it surged 4.98 per cent to Rs 564.80.
The company will reapply for a payment aggregator (PA) licence, a regulatory filing said on Wednesday.
"We would like to inform you that PPSL has received approval from the government of India, Ministry of Finance, Department of Financial Services, vide its letter dated August 27, 2024, for downstream investment from the company into PPSL."
"With this approval in place, PPSL will proceed to resubmit its PA application. In the meantime, PPSL will continue to provide online payment aggregation services to existing partners," Paytm filing said.
The Reserve Bank of India (RBI) had rejected Paytm's PA licence permit application in November 2022 and instructed the company to reapply with Press Note 3 compliance under the foreign direct investment norms.
As per Press Note 3, the government had made its prior approval mandatory for investments from nations that share land borders with India.