Paytm share price today: Paytm, the renowned fintech company, has been grappling with a severe crisis as its share price takes a nosedive. On Monday, the Paytm share price hit a lower circuit, plummeting by 10% to reach Rs 438.35 on the Bombay Stock Exchange.
This alarming decline comes in the wake of an ongoing regulatory crisis and fresh allegations of money laundering, with an investigation initiated by the Directorate of Enforcement (ED), as reported by the Economic Times.
Over the past three trading sessions, including the current one, Paytm’s stock has lost a staggering 42.4% of its value, resulting in a market capitalization drop of Rs 20,500 crore. These consecutive losses have compelled stock exchanges to revise the lower circuit limit from 20% to 10%.
Brokerages Turn Bearish Amid RBI Ban Brokerage firms, once optimistic about Paytm’s path to profitability, have now taken a bearish stance due to the crisis faced by Paytm Payments Bank, stemming from the Reserve Bank of India’s (RBI) ban imposed on January 31. This unforeseen development has raised concerns among investors.
ED Investigation and Denials
Paytm has been under ED investigation since 2021 for alleged money laundering and illegal betting, although the company staunchly denies any ED investigation related to money laundering. Paytm issued a statement asserting, “Neither the Company nor its founder and CEO are being investigated by the Enforcement Directorate regarding inter alia money laundering. In the past, certain merchants/users on our platforms have been subject to inquiries and on those occasions, we have always cooperated with the authorities.”
The company further emphasized its commitment to abiding by Indian laws and taking regulatory orders seriously, categorically denying involvement in any anti-money laundering activities.
RBI’s Threat to Paytm Payments Bank
The Reserve Bank of India’s potential cancellation of Paytm Payments Bank’s license next month looms as a significant threat to the company. Reports also suggest that the Confederation of All India Traders (CAIT) has advised businesses to explore alternative payment options and move away from relying on Paytm.
Brokerages Adjust Target Prices
In light of the RBI restrictions and the ongoing crisis, several brokerages have lowered their target prices for Paytm shares. Jefferies downgraded Paytm to ‘Underperform’ with a target price of Rs 500 per share, while Macquarie reduced its target price to Rs 650 per share. Motilal Oswal expressed caution about Paytm’s business model and suggested a target of Rs 575.
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