Shares of One 97 Communications Ltd., parent company of the payments aggregator Paytm fell another 10% on Monday after two successive drop of 20% on Thursday and Friday. Post the drop, the exchanges had revised the circuit filter to 10%. With today's drop, the stock has taken the three-day decline to 42%.
In an exchange filing on Sunday, Paytm categorically denied any investigation by the Enforcement Directorate on the company, its associates, and / or its founder & CEO Vijay Shekhar Sharma for anti-money laundering activities.
The company further said that the recent direction from the Reserve Bank of India is part of the ongoing supervisory engagement and compliance process.
Sources told CNBC-TV18 that there were major KYC irregularities and submission of false compliance were reported on Paytm and that the Payments Bank was not maintaining an arm's length with promoter entities.
According to sources, the curbs were first imposed in 2018 with violations observed in 2021. Additionally, despite engagements with the company, the deficiencies persisted.
There were also transparency concerns as compliance submitted by the bank was found to be false upon verification on several occasions. You can read more on that here.
The latest actions by the Reserve Bank of India (RBI) had also prompted multiple downgrades from analysts on the street.
Shares of Paytm had declined to an all-time low of ₹438.35 in November 2022, before they rebound. The stock had then made a 52-week high of ₹998 on October 20, 2023.
The stock had declined 20% in a single-day last month after the company had announced that they will focus on larger ticket size loans as well as recalibrate their Buy Now, Pay Later (BNPL) business.
Paytm's shares are down 10% at ₹438.50. The stock had made its stock market debut in 2021 at an IPO price of ₹2,150, from where it is down nearly 80%.
First Published: Feb 5, 2024 9:15 AM IST
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