Paytm shares fall another 5% after circuit limit revision, ED inquiry

Shares of Paytm parent company One97 Communications tanked another 5% in trade Thursday after stock exchanges BSE and NSE revised the circuit limits lower to 5% from 10% earlier. At 11.58 am, the stock was trading 5% lower at ₹325.05 on NSE.

The fresh revision in Paytm’s circuit limit comes a day after the scrip was locked at its 10% lower circuit limit. The price band has been revised from the existing levels with effect from today (February 15), according to a BSE notification.

Paytm shares fall another 5% after circuit limit revision, ED inquiry

To recall, the bourses had reduced the circuit limit for the Paytm shares to 10% from 20% after a steep volatility on the counter amid the Reserve Bank of India’s (RBI) restrictions on the Paytm Payments Bank.

The volatility in the Paytm stock also comes after the fintech major on February 14 in a clarification issued to the stock exchanges said the Enforcement Directorate has “over time” asked for certain documents that the company has provided.

The clarification was issued following reports saying that the ED had filed a case against the company over alleged FEMA violations.

“The company and its associates have continued to provide such information, documents, and explanations to the authorities as is required by them. Paytm Payments Bank does not undertake outward foreign remittances,” Paytm stated.

Meanwhile, when CNBCTV18 reached out to PPBL, Paytm spokesperson to CNBCTV18 : “In reference to inquiries and investigations by the Enforcement Directorate (ED) and other Regulatory Authorities, we would like to refer you to our clarification issued on 5th February on matters pertaining to One97 Communications Limited (OCL) and its associate, Paytm Payments Bank Limited (PPBL). We may be asked to furnish information and explanations by different regulatory and Law Enforcement Authorities, including ED, and we have always complied with the requirements dutifully by furnishing the requisite information and explanation.”

Paytm shares have lost about 55% of its value or ₹26,000 crore in market capitalisation since January 31, the day the RBI put strict restrictions on Paytm Payments Bank. Investors, meanwhile, have lost ₹1.17 lakh crore in market capitalisation since Paytm’s debut in 2021.

The digital payments start-up made one of the worst major Indian stock market debuts in 2021 as its shares fell more than 27% after listing.