Morgan Stanley acquires Paytm stake worth Rs 244 crore

Morgan Stanley Asia has bought 50 lakh shares of One97 Communications, Paytm’s parent company, for Rs 487.20 apiece in a bulk deal amounting to about Rs 244 crore. This move has come after RBI, on Wednesday ordered Paytm Payments Bank to stop accepting customer deposits from February 29, which led the startup share hitting the lower circuit for two consecutive days at 20%. Paytm has eroded nearly 717,400-crore investor wealth in two days.

According to the sources, the deal was completed on Friday's market closure. One97 Communications was stuck in a lower circuit for the second day in a row on Friday at Rs 487.20.

Since the majority of Paytm's services are provided in conjunction with other banks, the business stated in a statement that its services will remain available after February 29 (and not only the affiliate bank). Sharing it through his X handle, the founder of the company, Vijay Shekhar Sharma on Friday assured the users that the Paytm app will keep working beyond February 29.

To every Paytmer,
Your favourite app is working, will keep working beyond 29 February as usual.
I with every Paytm team member salute you for your relentless support. For every challenge, there is a solution and we are sincerely committed to serve our nation in full…

— Vijay Shekhar Sharma (@vijayshekhar) February 2, 2024

The business stated, "The directives from RBI are on Paytm Payments Bank and not Paytm." According to the statement, user deposits in their NCMC accounts, FASTags, wallets, and savings accounts are unaffected and users can keep using their current amounts.

Conclusion

The purchase was made through an open market transaction on the National Stock Exchange of India (NSE). This acquisition gives Morgan Stanley a 0.8% stake in One 97 Communications. The purchase came amid a decline in One 97 Communications' stock price, which had fallen by 20% that day due to regulatory concerns surrounding Paytm Payments Bank.