Paytm Dives Another 5% To Hit 52-Week Low For The 3rd Straight Session; Confirms ED Notice

Paytm, the digital payment giant's shares witnessed a sharp decline, dropping 5% to hit a fresh 52-week low on the National Stock Exchange (NSE) on Thursday morning. The beleaguered company confirmed receiving notices from the Enforcement Directorate (ED), contributing to a third consecutive session of losses.

This marks a continuation of the company's recent struggles, with the share price having plummeted by 10% in each of the two preceding sessions.

One97 Communication, the parent company of Paytm, issued a statement on Wednesday acknowledging the receipt of notices from the ED, seeking information on customers engaged in business with the group. The company, led by Vijay Shekhar Sharma, assured that it has provided the necessary information and documents to the investigative agency.

"The company and its associate have continued to provide such information, documents, and explanations to the authorities as is being required by them," stated the company in its filing to the stock exchanges.

This clarification came in response to a report, revealing that the ED had initiated a probe into suspected breaches at Paytm Payments Bank (PPBL) following a referral from the Reserve Bank of India (RBI).

February has been particularly challenging for Paytm's shareholders, witnessing a 57% loss in the stock's value at the current market price of Rs 325.30 per share. The nosedive comes after the RBI imposed restrictions on PPBL's operations, citing a system audit report and compliance validation report from external auditors.

The RBI, unyielding in its stance, has ruled out any review of its decision regarding Paytm Payments Bank.

Brokerage firms have responded to these developments by downgrading the stock. Global brokerage firm Macquarie, in a recent report, downgraded Paytm's rating to 'underperform' and substantially reduced its target price from Rs 650 to Rs 275 per share. The downgrade was attributed to the company's significant reduction in revenues across various segments.

As of 11:15 am on the National Stock Exchange (NSE), Paytm's shares were trading with nearly 5% cuts at ₹325.90 per share. Over the last year, the stock has witnessed a staggering fall of almost 47%.

Investors and industry observers are closely monitoring the situation as Paytm navigates through a complex web of regulatory scrutiny and market pressures. The company's ability to address the concerns raised by the ED and the RBI, coupled with a strategic approach to recovering its market standing.