The stock of PayTM dropped by 10% and hit the lower circuit after a 10% decline, resulting in a loss of more than 42% in three days
The PayTM stock fell by 10%, reaching the lower circuit again on February 5th, resulting in a decline of more than 42% over the past three sessions.
Since the Reserve Bank of India imposed restrictions on its banking unit’s operations, PayTM’s stock has hit back-to-back lower circuits. By Monday morning, it dropped from 761.4 rupees to 438.5 rupees.
The Reserve Bank of India (RBI) has imposed extensive restrictions on Vodafone Idea’s banking operations, including a ban on accepting new deposits and conducting credit transactions after February 29. Brokerage firms have swiftly cut their target prices and ratings for Vodafone Idea – Jefferies has reduced the target price by 500 rupees, while Macquarie has lowered it by 650 rupees.
During the weekend, Paytm was in crisis management mode, attempting to stem the flow of more negative news. The company has refused to face any investigation from the Enforcement Directorate (ED), stating that if allegations are relevant, an inquiry could be initiated into potential money laundering.
The SBI Chairman has stated that there have been no discussions regarding the business transfer with Paytm.
In a regulatory filing, the FinTech chief stated, “OSL (One97 Communications Limited), our associates, and/or its founders and CEO, categorically deny any investigation by the Enforcement Directorate for anti-money laundering activities.”
News reports suggest that the Reserve Bank of India is considering revoking Paytm’s banking license due to concerns about the safety of users’ funds. Over the past two years, regulatory authorities have imposed restrictions on the app’s transactions and banking operations following several warnings. On February 2, analysts at Jefferies issued an underperform call on the stock, setting a target price of ₹500 per share. The report stated, “We believe recent events will impact the company’s growth, and profitability timelines will be extended.”
Disclaimer: The opinions and investment strategies expressed by investment experts on Moneycontrol.com are their own, not those of the website or its management. Moneycontrol.com advises users to seek advice from certified experts before making any investment decisions.
Post Comment