One 97 Communications drops for third day; stock down over 77% from IPO price

One 97 Communications was locked in 20% lower circuit at Rs 487.05, extending losses for third day in a row.

In three sessions, the stock has dropped by 36.01%, from its recent closing high of Rs 761.10 recorded on 30 January 2024.

The scrip is currently trading 77.35% as lower as compared with its IPO price of Rs 2,150. The issue, which had received bids for 9.14 crore shares and was subscribed 1.89 times, had hit the domestic equity markets in the month of November 2021.

The counter came under significant selling pressure this week after Indias banking sector regulator asked the companys payment bank to halt its business.

The Reserve Bank of India (RBI) on Wednesday ordered Paytm Payments Bank to stop accepting deposits or top-ups in any customer accounts, wallets, FASTags and other prepaid instruments after February 29, 2024.

"No further deposits or credit transactions or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29, 2024, other than any interest, cashbacks, or refunds which may be credited anytime," the countrys banking regulator said in an official statement released yesterday.

In March 2022, the RBI, in exercise of its powers under section 35A of the Banking Regulation Act, 1949, had directed Paytm Payments Bank (PPBL or the bank) to stop onboarding of new customers with immediate effect.

The comprehensive system audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action, the central bank further added.

The RBI has directed the Paytm Payments Bank to settle all pipeline transactions and nodal accounts (in respect of all transactions initiated on or before February 29, 2024) by March 15, 2024, and that no further transactions will be permitted thereafter.

No other banking services like fund transfers, Bharat Bill Payment Operating Unit (BBPOU), and Unified Payments Interface (UPI) facility will be provided by the bank after February 29, 2024.

Paytm Payments Bank, an associate of One 97 Communications (OCL), said it is taking "immediate steps" to comply with the RBI's directions.

One 97 Communications said: "OCL, as a payments company, works with various banks (not just Paytm Payments Bank), on various payments products. OCL started to work with other banks since starting of the embargo. We now will accelerate the plans and completely move to other bank partners.

Going forward, OCL will be working only with other banks, and not with Paytm Payments Bank Limited. The next phase of OCLs journey is to continue to expand its payments and financial services business, only in partnerships with other banks."

One 97 Communications is the digital financial services firm which operates under the Paytm brand. Paytm is India's payment super app offering consumers and merchants comprehensive payment services.

The company had reported a consolidated net loss of Rs 221.70 crore in Q3 FY24 as against a net loss of Rs 392.10 crore posted in Q3 FY23. Revenue from operations jumped 38.23% to Rs 2,850.5 crore in the quarter ended 31 December 2023 from Rs 2,062.2 crore recorded in the same period last year.

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