Paytm Share Price Plummets Over 42% in 3 Sessions in February. What’s Behind the Decline?
Paytm Share Price Continues Downward Spiral, Hits Lower Circuit for Third Consecutive Day at ₹438.35 on BSE. Unabated Downward Pressure Despite Revised Lower Circuit Limit from 20% to 10%,
“The Paytm stock witnessed a further decline after the Reserve Bank of India (RBI) imposed restrictions on Paytm Payments Bank (PPBL), prohibiting it from conducting certain operations. The latest fall places the Paytm stock 56% below its 52-week high and nearly 80% below its IPO price of ₹2,150.
In February alone, Paytm stock has plummeted over 42% in three sessions, following an almost 20% rise in January. Over the last year, the stock has seen a decline of over 7%.
The RBI issued a directive on January 31, instructing Paytm Payments Bank to halt new credit and deposit operations, along with other banking activities, after February 29. This action was taken due to Paytm Payments Bank’s failure to comply with regulations despite repeated warnings from the RBI.
The central bank expressed concerns about falsified compliances, irregularities in Know Your Customer (KYC) norms, and related party transactions, leading to the suspension of certain banking operations of Paytm Payments Bank.
The Paytm stock drew attention amidst media reports of an investigation by the Enforcement Directorate on One97 Communications Ltd. However, the company denied these allegations, stating, ‘Neither the Company nor its founder and CEO are being investigated by the Enforcement Directorate regarding inter alia money laundering. In the past, certain merchants/users on our platforms have been subject to inquiries, and on those occasions, we have always cooperated with the authorities. During any such investigations by the authorities on any set of merchants/users in the past, we have cooperated with them on these investigations.’
Paytm responded to the concerns and reports surrounding the RBI’s directive by stating that the recent direction from the RBI is a part of the ongoing supervisory engagement and compliance process. They urged stakeholders to refer to the official press release of RBI dated January 31, 2024, for accurate information and cautioned against relying on unofficial sources.
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