Paytm shares: Paytm’s pricing band has been revised from 20% to 10%, and it was locked at Rs 438.35, down 10%.
For the third consecutive session on Monday, shares of One 97 Communications Ltd (Paytm) were restricted by lower circuit limits of 10% amid concerns raised by a media report indicating that the Reserve Bank of India (RBI) was contemplating the cancellation of Paytm Payment Bank’s license. Despite a clarification from the management addressing speculative media articles related to an Enforcement Directorate (ED) investigation and asserting the company and its CEO’s non-involvement in anti-money laundering activities, the stock failed to recover.
The Paytm stock, now subject to a revised 10 percent price band instead of the previous 20 percent, was halted at Rs 438.35, marking a 10 percent decline. Consequently, the script has experienced a 43 percent decrease over the past three sessions. A Bloomberg report hinted at the Reserve Bank of India (RBI) contemplating the cancellation of Paytm Payments Bank’s license as soon as next month. Additionally, another report mentioned that the trader body CAIT recommended traders shift from Paytm to alternative payment options.
In response to the RBI regulations, a few brokerages have drastically lowered their target PAytm prices. The stock was downgraded by Jefferies to “Underperform,” and its target price was lowered to Rs 500 per share. Macquarie lowered its target price per share to Rs 650.
Paytm shares fell 10% today, dropping 43% in three days. what’s the reason?
The last time Motilal Oswal took a “watchful stance” on Paytm’s business model robustness and its capacity to handle the erratic macro and regulatory landscape, it was. It recommended setting a goal of Rs 575 on Paytm. Paytm released an explanation. “To clear up any confusion, we firmly reject any participation in any anti-money laundering initiatives. Paytm stated, “We have adhered to Indian laws and will continue to do so. We also take regulatory orders very seriously.”
In a disclosure submitted to the stock exchanges, Paytm clarified that neither the fintech company nor its founder and CEO are under investigation by the Enforcement Directorate for issues, including but not limited to, money laundering. Paytm further emphasized that in previous instances where specific merchants or users on its platforms faced inquiries, the company cooperated fully with the authorities.
