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Paytm Shares Crash:
Paytm shares slipped below Rs 675 for the first time after RBI barred its payments bank – Paytm Payments Bank – from opening new accounts. Paytm Payments Bank said it is taking immediate action to comply with the RBI directive, and its existing customers can continue to operate banking and digital payment services without any interruption.
Paytm, not only dropped its market valuation but also paused the investors who invested money in this digital payment company. Paytm’s IPO valuation was Rs 1.4 lakh crore, which has now come down to Rs 44,689 crore.
The company’s shares are falling continuously. Today on Monday, a big drop of up to 12 percent was seen in the shares of Paytm. This fall comes after the news in which RBI has banned Paytm Payments Bank from adding new customers. Along with this, the bank has also been asked to conduct a comprehensive audit of its IT systems. This has led to a sharp fall in the shares of Paytm’s parent company One 97 Communications.
65% loss so far
Let us tell you that Paytm had kept the issue price of Rs 2150 in the IPO. The shares of the company have not yet reached this level. Paytm’s all-time high is Rs 1,961, which was recorded on the day of listing. Since then, buying was seen in the shares of the company only in a few trading days, otherwise the company’s shares remained in loss every day. The stock of Paytm has lost nearly 65 per cent of its issue price.
The company’s shares were listed on the market on 18 November 2021. It closed listing at Rs 1564, down 27 per cent on the day of listing as compared to its issue price of Rs 2,150. Today, as soon as the stock market of the company opened, the lowest level ever reached Rs 672, which is 65 percent less.
Paytm parent One97 Communications
Shares in Paytm parent One97 Communications were on Monday barred by the RBI from opening new accounts of the company’s payments bank – Paytm Payments Bank – citing “material supervisory concerns”.
Shares of Paytm fell 13.3 per cent to an all-time low of Rs 672.1 on the BSE, which is 68.7 per cent lower than its issue price of Rs 2,150. Before Monday’s fall, the stock had hit an all-time low of Rs 728.5 on March 8.
This is the third time that One97’s payments banking arm is facing the banking regulator’s action since its inception in May 2017.
Market expert Prakash Dewan said he was not surprised by the news on Paytm, the first few fintech platforms to move to a payments bank in a “quite quick” move.
“But the kind of mass participation that you have in the Paytm platform is definitely something that has always been rolled out in some sort of gap in terms of compliance especially on KYC… the way IT platforms do that. Could verify all the documents which was very new to banking from all parts of the country especially in many areas,” he said.
Dewan sees further fall in Paytm stock. “No one is going to buy into this with their neck out, especially when there is such a huge area of concern that needs repair…the valuation will definitely start to look more expensive than it was at the time of the IPO,” he said.
Macquarie maintains an ‘underperform’ rating on Paytm with a target price of Rs 700. The brokerage expects the RBI action to have a significant impact on the company’s brand and customer loyalty.
Since its listing on stock exchanges BSE and NSE in mid-November, Paytm shares have suffered several losses at a discount of around nine per cent from the issue price. Its IPO – the biggest ever in India – saw total bookings of 1.9 times the shares on offer, failing to win the interest of investors garnered by most IPOs in 2021.
Stocks Continously Falling
This stock has been in a continuous downtrend. There has been a decline of more than 49 percent on a year-on-year basis. The shares are trading below the 5 days, 20 days, 50 days, 100 days, and 200 days moving averages.