Paytm shares fall after regulatory ban, CEO’s arrest
Paytm shares fell nearly 13 per cent on Monday after Indian regulators banned the troubled payments platform from enrolling new customers and reports emerged that its founder was arrested for ramming into a police car. .
With the backing of Chinese tycoon Jack Ma’s Ant Group and Warren Buffett’s Berkshire Hathaway, the firm enjoyed India’s biggest initial public offering four months ago.
But it has lost more than two-thirds of its market cap despite an impressive position in the local digital payments sector, as investors worry about whether the perennial loss-maker will ever turn a profit.
India’s central bank on Friday demanded Paytm to immediately stop enrolling new customers and ordered an audit of its IT systems, citing “certain material supervisory concerns observed at the bank”.
Shares of the company closed down 12.84 per cent in Mumbai after hitting a record low in Monday’s trade.
Paytm said it is “committed to work with the regulator to address their concerns as soon as possible”.
The firm’s troubles escalated over the weekend when it was reported that founder and chief executive Vijay Shekhar Sharma was briefly detained after a senior police officer was hit by a car and fled the scene in the capital New Delhi last month. went.
Paytm downplayed the incident in a statement on Sunday, describing the accident as a “minor offence”.
Named India’s youngest billionaire in 2017, Mr Sharma launched Paytm in 2010 and has become synonymous with digital payments in a country traditionally dominated by cash transactions.
His venture has benefited from government efforts to curb the use of hard currency – including the demonetization of nearly all banknotes in circulation five years ago – and from the pandemic.
According to the company’s regulatory filings, the platform had 350 million customers at the end of December.
But the past few months have seen a dramatic reversal of fortunes for the platform and Sharma has seen his net worth drop by more than $1.5 billion since his November 2021 market debut.
Paytm’s parent company One97 Communications reported a net loss of Rs 7.79 billion ($102 million) in the December quarter.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)