New Delhi: The share price of One 97 Communications, the parent company of Paytm, plunged to an all-time low to Rs 685 per share on Monday.
The share prices of the digital payment firm plunged 12 per cent on the Bombay Stock Exchange. The shares have nosedived to almost about 70 per cent from its issue price of Rs 2,150 per share.
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This comes after the central bank under Section 35A of the Banking Regulation Act, 1949, barred Paytm Payments Bank from acquiring new customers and directed the bank to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system.
“Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing a report of the IT auditors," the central bank said.
Meanwhile in a separate incident, Paytm founder and CEO Vijay Shekhar Sharma was arrested by Delhi Police last month and later released on bail in a case of rash driving, according to the Indian Express report.
Sharma was allegedly driving a Jaguar Land Rover that hit the vehicle of Benita Mary Jaiker, DCP (South district) in February.
Sharma owns 51 per cent in Paytm Payments Bank while One97 Communications holds the rest. Paytm was listed in the exchanges in November last year in one of the biggest-ever initial public offering. But the listing was tepid, and shares have fallen nearly 70 per cent since the listing.
Analysts at ICICI Securities told news agency Reuters, the digital payments startup would have to increase its efforts to enhance engagement with the existing user base to offset any adverse impact of the embargo on new users.
Macquarie Research analysts expect a significant impact on Paytm's brand and customer loyalty, as per the report. They said the recent developments would substantially lower the chance of Paytm Payments Bank upgrading to a small finance bank.