Shares of One97 Communications Ltd, the parent company of the Paytm brand, faced another significant downturn on Friday, plunging by 20% after the Reserve Bank of India (RBI) directed Paytm Payments Bank Ltd (PPBL) to cease accepting deposits or top-ups in any customer accounts, wallets, FASTags, and other instruments after February 29. The stock hit the lower circuit limit for the day, reaching Rs 487.05 on the BSE and Rs 487.20 on the NSE. This marks a consecutive day of decline, as shares of One97 Communications had already plummeted by 20% on the previous day.
In the span of two days, the market capitalization of One97 Communications eroded significantly, witnessing a decline of Rs 17,378.41 crore to Rs 30,931.59 crore. The impact on Paytm’s annual operational profit is estimated to be in the range of Rs 300-500 crore due to customers being unable to add money to their wallets and FASTags following the RBI directive against PPBL.
The Reserve Bank of India took this action against PPBL based on a comprehensive system audit report and the subsequent compliance validation report by external auditors. It is noteworthy that One97 Communications holds a 49% stake in PPBL, yet it is classified as an associate rather than a subsidiary by the company. The unfolding events have raised concerns and led to a tumultuous period for the fintech firm, reflecting the challenges it is currently navigating in the regulatory landscape.
