Paytm’s shares faced a sharp decline, dropping 20% in early trading on February 1. This drop followed the Reserve Bank of India’s (RBI) significant limitations placed on Paytm’s lending activities. The RBI’s restrictions include a ban on accepting new deposits and conducting credit transactions after February 29.
The stock opened at a lower circuit on the NSE, falling to Rs 609 per share, a stark contrast to the closing price of Rs 761 in the previous session. Throughout the year, Paytm’s stock has seen a decrease of about 1%, following a 27.45% loss in 2023. Mutual funds’ stake in Paytm stood at approximately 5% at the end of the December 2023 quarter, up from 2.79% in the previous quarter.
The RBI’s decision came after an external auditor’s validation report highlighted ongoing non-compliance issues and serious supervisory concerns with Paytm Payments Bank. In response, Paytm has announced steps to comply with the RBI’s directives and is working closely with the regulator to resolve the issues swiftly.
Paytm has also informed the exchanges about the potential financial impact of the RBI’s actions, estimating a worst-case scenario of Rs 300-500 crore on its annual EBITDA. Despite this, the company remains optimistic about continuing its path towards improved profitability.
