Paytm Shares Dip 5% as Circuit Limit Revised Amid Regulatory Scrutiny

15 Feb 2024 , 02:10 PM

Paytm shares experienced a 5% decline on February 15, following a revision in the circuit limit from 10% to 5% by stock exchanges. This revision came a day after Paytm shares were locked at their 10% lower circuit limit.

The circuit limit adjustment is based on the Last Traded Price (LTP) of the stock and is typically done when a stock’s value significantly decreases. The Reserve Bank of India’s actions against Paytm Payments Bank led to the stock hitting lower circuits multiple times, resulting in a 50% decline for Paytm parent One 97 Communications since the January 31 crackdown.

As of the current writing, Paytm shares were trading 5% lower at ₹325.05 on the NSE.

The share price decline also followed a clarification issued by Paytm on February 14, stating that the Enforcement Directorate had requested certain documents over time, which the company has provided.

Media reports had suggested that the Enforcement Directorate filed a case against Paytm for alleged FEMA violations.

Paytm, along with its subsidiaries and associate, Paytm Payments Bank, confirmed receiving notices and requisitions for information from authorities, including the ED, related to customers’ business dealings with the respective entities.

Paytm emphasized its continued cooperation, providing the required information, documents, and explanations to the authorities. It clarified that Paytm Payments Bank does not undertake outward foreign remittances.

Paytm, founded in 2010 by Vijay Shekhar Sharma under One97 Communications, is a leading Indian multinational financial technology company specializing in digital payments and financial services. It was listed on Indian stock exchanges on November 18, 2021, after a significant initial public offering. In the fiscal year 2022–23, Paytm reported a gross merchandise value (GMV) of ₹13.2 Lakh Crore (US$170 billion).

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