Paytm plunges 42% in 3 days; erodes nearly Rs 20,500 crore in market value

Paytm's market capitalisation has eroded by Rs 20,497 crore in 3 days, while from its all time high level of Rs 1.24 trillion, the m-cap has been wiped off by nearly Rs 1 trillion

Shares of One 97 Communications, parent of fintech giant Paytm, crashed to the lower circuit for the third straight day on Monday, down 10 per cent at Rs 438.35 on BSE with only sellers on the counter.

The downward pressure has remained unabated even as exchanges revised the lower circuit limit for the stock from 20 per cent to 10 per cent over the weekend. 

With today's losses, the stock also pulled back to its record low level touched on November 23, 2022. A combined 6.2 million shares changed hands and there were pending sell orders for 5.62 million shares on exchanges at the time of this report.

In the past three days, Paytm's share has plunged 42 per cent following the Reserve Bank of India (RBI)'s diktat to halt nearly all transactions of its digital payment unit Paytm Payments Bank (PPBL) from March 1. 

The company has seen its market capitalisation (market cap) erode by Rs 20,497 crore during this period, while from its all time high level of Rs 1.24 trillion, the m-cap has been wiped off by nearly Rs 1 trillion. 

The stock is now down 78 per cent from its record high level of Rs 1,955 touched on November 18, 2021. Currently, its market cap stands at Rs 27,839 crore, as per BSE data.

This despite Paytm further denying reports about any investigation by the Enfo­rcement Directorate (ED) into the company, its associates, and its fou­nder and Chief Executive Officer (CEO), Vijay Shekhar Sharma on possible money laundering.

Morgan Stanley on February 3 had bought 5 million shares of One 97 Communications for Rs 244 crore through an open market purchase.

Morgan Stanley through its affiliate Morgan Stanley Asia (Singapore) Pte - ODI picked up shares at a price of Rs 487.20 per share.

On January 31, the RBI said no further deposits or credit transactions or top-ups would be allowed in customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Card (NCMC) cards, etc after February 29 other than any interest, cashback, or refunds that may be credited at any time.

The RBI has restricted PPBL from taking fresh deposits and credit transactions across its services due to non-compliance of regulations and supervisory concerns.

Paytm expects an impact on its annual earnings before interest, taxes, depreciation and amortisation (Ebitda) in the range between Rs 300 and Rs 500 crore. The company has clarified the regulator’s move will not affect its verticals.

One 97 Communications said that it is already working with other banks and will accelerate its plans and completely move to third-party partners.

Meanwhile, the company on Sunday said it had cooperated with the authorities when users or merchants on its platform were subject to enquiries in the past.

“We would like to set the record straight and deny any involvement in anti-money laundering activities. We continue to abide by Indian laws and take regulatory orders with utmost seriousness,” it said.

Amid the spreading speculation and misinformation on the reasons for RBI action on Paytm Payments Bank, it said the recent RBI direction is a part of the ongoing supervisory engagement and compliance process. CLICK HERE FOR FULL STATEMENT