Paytm share price today: One 97 Communications plummets 42% in just 3 days as investors lose Rs 20,500 crore

Paytm share price today: Shares of Paytm or One 97 Communications, the troubled fintech company, dropped 10% on Monday to reach its lower circuit limit of Rs 438.35 on the Bombay Stock Exchange. The regulatory crisis surrounding the company has escalated with fresh allegations of money laundering and an investigation by the Directorate of Enforcement (ED), according to an ET report.Over the past three trading sessions which includes today, the stock has lost 42.4% of its value, equivalent to Rs 20,500 crore in market capitalisation.
Following two consecutive days of 20% losses in Paytm, stock exchanges have revised the lower circuit limit to 10%.
Rajesh Palviya of Axis Securities advised against bottom fishing at this point, stating that the market is still digesting the news. Those who are still holding the stock are looking to exit.
Brokerages, which were previously optimistic about Paytm’s path to profitability, have now turned bearish due to the crisis faced by Paytm Payments Bank following the RBI ban on January 31.
It has been reported that Paytm has been under ED investigation since 2021 for alleged money laundering and illegal betting. However, Paytm has denied any ED investigation on money laundering.
In a recent clarification, Paytm stated, “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 enquiries 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.”
ET had previously reported that RBI alerted ED a few months ago about possible money laundering and know-your-customer (KYC) violations at Paytm.
Paytm Payments Bank, in which Paytm holds a 49% stake, has been directed by RBI to discontinue most of its operating functions (deposit, PPI, wallet, Fastag, BBPOU, UPI) by the end of February 29, 2024. PPBL has also been instructed not to engage with Paytm’s other business units for Nodal accounts.
Macquarie has expressed concerns about the revenue and profitability implications of the RBI ban in the medium to long term. Suresh Ganapathy of Macquarie stated that given the severe restrictions imposed on PBPL, they believe it significantly hampers Paytm’s ability to retain customers in its ecosystem, and accordingly restricts it from selling payment products and loan products.
Jefferies analysts have warned that Paytm’s business will also be affected by reputational concerns related to governance/compliance, and its lending business will face challenges.
While Paytm management has estimated that the regulatory trouble could impact EBITDA by Rs 300-500 crore (which is 20-30% of FY25 earnings), Jefferies analysts believe the impact could be higher at 45%, including an additional 20% hit from a sustained lending business slowdown.
In response, Paytm has stated that it will seek partnerships with other banks to offer various payment products to its customers.

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