Shares of One97 Communications Ltd, the parent firm of Paytm, on Monday experienced another sharp decline, plunging by 10 per cent to reach its lower circuit limit. This drop follows a continuous trend of investors offloading their holdings in response to the Reserve Bank of India's (RBI) recent regulatory actions against the fintech firm.
On the BSE, the stock nosedived to Rs 438.35, hitting the lowest trading limit permissible for the day. Similarly, on the National Stock Exchange (NSE), it tumbled by 9.99 per cent to touch its lower circuit limit of Rs 438.50.
In a span of merely three days, the stock has incurred a staggering 42 per cent loss, erasing nearly Rs 20,471.25 crore from its market valuation.
The regulatory scrutiny intensified last week when the RBI issued directives to Paytm Payments Bank Ltd (PPBL), a restricted banking entity associated with One97 Communications Ltd. The directive instructed PPBL to cease accepting further deposits, conducting credit transactions, or facilitating top-ups for customer accounts, prepaid instruments, and cards designated for road toll payments, effective February 29.
ALSO READ | Services Sector In India Logs Fastest Growth In 6 Months, PMI Touches 61.8 In Jan
PPBL, which operates as a subsidiary of One97 Communications Limited, is directly controlled by Vijay Shekhar Sharma, who holds a majority 51 per cent stake in the bank.
In response to the regulatory measures, Paytm management has engaged in discussions with the RBI to ensure compliance with the directives while seeking avenues to sustain business operations.
Despite alternative wallet options and FASTag services available from other providers, Paytm anticipates a significant impact on its annual operational profit, estimating a range of Rs 300-500 crore.
Meanwhile, its CEO Vijay Shekhar Sharma on Monday denied any reports of the Enforcement Directorate initiating a probe against the fintech firm.
ALSO READ | Hyundai Motor Likely To Launch India's Largest-Ever IPO This Diwali: Report