On Monday, the share price of One 97 Communications, the parent company of Paytm, plunged to an all-time low of Rs 685 per shares.
The digital payment firm’s share prices plummeted on the Bombay Stock Exchange, plummeting to about 70% from its issue price of Rs 2,150 per share.
After an RBI circular, the central bank under Section 35A of the Banking Regulation Act, 1949, directed Paytm Payments Bank to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system, this came about.
The central bank has said that it will allow Paytm Payments Bank Ltd to onboard new customers only after reviewing a report from the IT auditors.
According to a recent Indian Express report, Paytm founder and CEO Vijay Shekhar Sharma was arrested last month for driving rashly. He was later released on bail in the case.
Sharma allegedly hit the car of DCP Jaiker with his Jaguar Land Rover.
Sharma owns a majority stake in Paytm Payments Bank, while One97 Communications holds the rest. The company was listed on exchanges in November last year and raised over $1 billion during its IPO.
The listing of the company was not successful, and the share price has fallen nearly 70% since then.
Digital payments startup Circle would have to increase its efforts to engage with the existing user base in order to offset any adverse impact of the embargo on new users, analysts at ICICI Securities told Reuters.
According to a Macquarie Research report, Paytm’s brand and customer loyalty will be significantly impacted by the company’s acquisition by Walmart.
Recent developments have substantially lowered the chance that Paytm Payments Bank will upgrade to a small finance bank.
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