Paytm slips 20% in two days, m-cap falls below Rs 40,000 crore
Paytm shares plunged 85.80 points or 12.71% to close at Rs 589.00
The stock has lost over 70% from its issue price of Rs 2,150 per share
RBI barred Paytm Payments Bank from onboarding new customers because of certain supervisory concerns
Shares of One 97 Communications, parent of Paytm, slipped another 10% on March 15 after a 13% decline on March 14 as investors continued to abandon the stock on rising concerns over its business model.
At 1:17 pm, Paytm shares were trading at Rs 610.30, down by 64.50 points or 9.55%. The company dropped out of the 100-most valued companies list on the BSE with a market capitalisation of Rs 39,686 crore. The stock has lost over 70% from its issue price of Rs 2,150 per share.
Paytm shares plunged 85.80 points or 12.71% to close at Rs 589.00 on Tuesday
The Reserve Bank of India (RBI) on March 11 barred Paytm Payments Bank from onboarding new customers with immediate effect because of certain supervisory concerns. Paytm Payments Bank processes transactions for Paytm.
On Tuesday, the trading volume at the counter jumped over three times with a combined 9.71 million equity shares changing hands on the BSE and NSE. The higher-than-usual delivery volumes show that investors are concerned about the RBI’s action against the payments bank as it can affect the overall brand of Paytm.
Investors are concerned that the ban on onboarding new customers will lead to a significant impact on the business revenue even though the company said that the RBI's order will have no major impact.
The company said the RBI action does not impact any existing customers of Paytm Payments Bank, who can continue to use all banking and payment services without interruption. All existing users of Paytm UPI, Paytm Wallet, Paytm FASTag and bank accounts can continue to use these instruments, including debit cards and net banking, for payments.
Adding to the worries for Paytm, a Bloomberg report on Monday said that the Reserve Bank of India’s order banning the company’s payments bank from onboarding new customers was likely associated with sharing of local data with Chinese servers and failing to properly verify customers.
Paytm has called the Bloomberg report false and sensationalist. “The recent Bloomberg report on Paytm Payments Bank claiming data leak to Chinese firms is completely false and simply sensationalizing. Paytm Payments Bank is proud to be a completely homegrown bank and is fully compliant with RBI’s directions on data localization,” the company said in a regulatory filing.