Paytm shares extend slide, shed 24% in two sessions and 72% from IPO price

Stock slips 12.3% on Tuesday to end at a new low of Rs 592, as RBI ban on Paytm Payments Bank from onboarding new customers last Friday weighs

Shares of One97 Communications, parent company of digital payments major Paytm, dropped 12.3 per cent on Tuesday, extending its two-day slide to 24 per cent. The stock ended at a new low of Rs 592. The plunge in its stock price comes after the Reserve Bank of India (RBI) on Friday barred Paytm Payments Bank from onboarding new customers citing “material supervisory concerns.” The central bank has said the restrictions will continue until a comprehensive audit of its information-technology systems.

Paytm shares are now down 72 per cent over their issue price of Rs 2,150.

Analysts say the regulatory issues will not have a big impact on the company’s business but can act as a big overhang for the stock.Paytm shares now trade below price targets set by most brokerages such as Macquaire and Morgan Stanley.

At its last close, Paytm was valued at Rs 38,419 crore, a far cry from the Rs 1.39 trillion valuation it got in its maiden offering in November. The company is now 124th most valuable stock in the doemstic market. At IPO valuation, it was among the top 40.

The drop in share price has hurt investors such as Blackrock, Canada Pension Plan Investment Board, Birla Mutual Fund and Singapore’s GIC who invested heavily in its IPO.

The mutual fund exposure to the Paytm stock, however, was just Rs 555 crore at the end of February. This has come down further given the recent drop in its stock price.