Shares of One97 Communications Ltd, which owns Paytm brand, on Friday plummetted another 20 per cent. The decline comes as the RBI has directed Paytm Payments Bank Ltd (PPBL) to stop accepting deposits or top-ups in any customer accounts, wallets, FASTags and other instruments after February 29.
On the BSE, the Paytm stock tanked 20 per cent to Rs 487.05 — its lowest trading permissible limit for the day. On the NSE, it tumbled 20 per cent to hit the lower circuit limit of Rs 487.20. Shares of One97 Communications plummeted 20 per cent on Thursday as well.
In two days, the company’s market capitalisation (mcap) eroded by Rs 17,378.41 crore to Rs 30,931.59 crore. This week so far, Paytm shares are now down 36 per cent.
Fintech firm Paytm sees an impact of Rs 300-500 crore on its annual operational profit, as its customers will not be able to add money to their wallets, FASTags etc as RBI barred Paytm Payments Bank Ltd from accepting deposits or top-ups in any customer account.
RBI’s Action Against Paytm Payments Bank
The RBI on Wednesday, January 31, directed Paytm Payments Bank Ltd (PPBL), which houses all of Paytm’s 330 million wallet accounts, to stop accepting deposits or top-ups in any customer accounts, wallets, FASTags and other instruments after February 29. Till then, customers can add money as well as withdraw money from the Paytm wallet and PPBL account.
RBI said the action against PPBL followed a comprehensive system audit report and subsequent compliance validation report of external auditors. One97 Communications Ltd (OCL) holds a 49 per cent stake in PPBL but classifies it as an associate of the company and not as a subsidiary.
The central bank, however, said any interest, cashbacks, or refunds may be credited back to customers anytime. It said the direction follows persistent non-compliances and continued material supervisory concerns.
What Paytm Said
In the company’s latest attempt to calm the nerves of its app users, Paytm CEO Vijay Shekhar Sharma said in a post on X on Friday, “Your favourite app is working, will keep working beyond 29 February as usual… For every challenge, there is a solution and we are sincerely committed to serve our nation in full compliance.”
On Thursday, Bhavesh Gupta, president and chief operating officer of Paytm, said on a call with analysts after market hours on Thursday that Paytm expects to get back to normalcy by March, “if not earlier”.
He added that the company had been holding discussions with the RBI and those have been on the “positive side”.
Jefferies in a note said there was no clarity on RBI actions after the company’s analyst call, and added that the recent events would drag the company’s growth and elongate profitability timelines.
(With Inputs From Agencies)
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