New Delih: The share price of Paytm`s parent company One 97 Communications Ltd has tumbled by over 20 percent in the last two days after the Reserve Bank of India (RBI) barred Paytm Payments Bank from onboarding new customers.
The scrip of the Digital payments company tumbled 12.2%, extending its slump amid mounting regulatory woes and a decision by investor SoftBank`s representatives to leave the company`s board.
The company`s market capitalisation slipped below Rs 40,000 crore for the first time. On the day of its stock market debut on November 18, 2021, the market capitalisation of One 97 Communications Ltd stood at Rs 1.01 lakh crore. The company has lost over Rs 60,000 crore in market capitalisation in less than four months.
One97 Communications holds a 49 percent stake in Paytm Payments Bank (PPBL). The RBI last week directed PPBL to stop opening new accounts amid “material supervisory concerns” observed in the bank. The bank has also been directed to appoint an IT audit firm to conduct a comprehensive system audit of its IT system. Reports claimed that PPBL’s servers were sharing information with China-based entities that indirectly own a stake in Paytm Payments Bank.
In its reply to the RBI`s action, One 97 Communications Ltd said, “The bank (Paytm Payments Bank) is taking immediate steps to comply with RBI directions, including appointment of a reputed external auditor to conduct a comprehensive System Audit of its IT systems. PPBL remains committed to working with the regulator to address their concerns as quickly as possible.”
Meanwhile, a Reuters report, quoting sources said that representatives of SoftBank Group Corp will step down from the boards of Paytm and the parent of online insurance aggregator Policybazaar.
“The decision is part of SoftBank`s global strategy to exit from the boards of most of its listed portfolio companies, said the source, adding that the Japanese tech conglomerate expected it would leave fewer regulatory issues to tackle,” added Reuters.