One97 Communications Ltd, the parent company of Paytm, experienced a further 10% decline in its shares, reaching the lower circuit limit, as investors persisted in offloading the stock in response to the RBI’s regulatory measures.
The stock dropped by 10% to Rs 438.35, reaching its daily lower permissible limit on the BSE. Similarly, it witnessed a 9.99% plunge, hitting the lower circuit limit of Rs 438.50 on the NSE.
In three days, the stock has tumbled over 42%, wiping out Rs 20,471.25 crore, from its market valuation.
The central bank has directed Paytm Payments Bank Ltd (PPBL), an associate of One97 Communications Limited (OCL) to suspend a significant portion of its operations, including the acceptance of additional deposits, conducting credit transactions, and facilitating top-ups for customer accounts, prepaid instruments, wallets, and cards used for road toll payments, effective from February 29.
Customers will still have access to their existing deposits and can utilise the funds stored in their wallets for services until the end of February. If the RBI does not reconsider its decision, top-ups for Paytm wallets will cease, and transactions through them will no longer be permitted.
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One97 Communications holds 49% of the paid-up share capital (directly and through its subsidiary) of PPBL. Vijay Shekhar Sharma, founder of Paytm has a 51% stake in the bank.
While users have the option to switch to other wallets, and FASTag services etc being provided by other vendors, Paytm management has said that PPBL is in discussion with RBI to comply with their direction for continuing the business.
Paytm sees an impact of Rs 300-500 crore on its annual operational profit.
In a response to the development, Sharma posted on X (formerly Twitter) saying, “Your favourite app is working, will keep working beyond 29 February as usual.”
His post added, “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 compliance. India will keep winning global accolades in payment innovation and inclusion in financial services – with PaytmKaro as the biggest champion of it.”
(Additional info has been added to this PTI copy for context)
Edited by Affirunisa Kankudti
