Paytm Shares Dip 5 Per Cent After Circuit Revision, ED Probe
The downward trend in Paytm's share price has been notable since the Reserve Bank of India's regulatory actions against Paytm Payments Bank
Paytm shares experienced a 5 per cent decline on Thursday (February 15), following a revision in circuit limits by stock exchanges. This adjustment reduced the circuit limit on the counter from 10 per cent to 5 per cent. The change came swiftly after Paytm shares were previously locked at their 10 per cent lower circuit limit. The BSE announced the revision, which became effective from February 15. This adjustment marks a successive reduction in the circuit limit, previously lowered from 20 per cent to 10 per cent.
As of 1 pm, Paytm shares were trading 4.99 per cent lower at Rs 325.25 on the BSE.
Circuit limits, which determine the maximum percentage by which a stock price can fluctuate in a single trading session, are typically revised based on the Last Traded Price (LTP) of the stock. When a stock experiences a significant decline in value, exchanges often lower the circuit limits for that particular stock to manage volatility.
The downward trend in Paytm's share price has been notable since the Reserve Bank of India's (RBI's) regulatory actions against Paytm Payments Bank. Since the crackdown on January 31, Paytm's parent company, One 97 Communications, has witnessed a staggering 50 per cent decrease in its stock value.
The recent decline in share price follows a clarification issued by Paytm on February 14 regarding inquiries from the Enforcement Directorate (ED). The company stated that over time, the ED had requested certain documents, which Paytm has duly provided.
Media reports had earlier suggested that the Enforcement Directorate had initiated a case against Paytm over alleged Foreign Exchange Management Act (FEMA) violations. In response, Paytm clarified that it, along with its subsidiaries and associate, Paytm Payments Bank, had received notices and requests for information, documents, and explanations from various authorities, including the ED.
The company said that it cooperated with the authorities, stating that it has continued to furnish the required information, documents, and explanations. Paytm further clarified that Paytm Payments Bank does not engage in outward foreign remittances.
The fluctuation in Paytm's share price and the ongoing regulatory scrutiny underscore the challenges facing the company amidst evolving regulatory landscapes and market conditions.
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