Paytm shares nosedive after regulatory ban, CEO arrest
Paytm shares nosedived virtually 13 p.c Monday after Indian regulators banned the beleaguered funds platform from enrolling new prospects and reviews emerged that its founder was arrested for crashing right into a police automobile.
The agency loved India’s greatest preliminary public providing 4 months in the past, with the backing of Chinese language tycoon Jack Ma’s Ant Group and Warren Buffett’s Berkshire Hathaway.
However it has since misplaced greater than two-thirds of its market cap regardless of a commanding place within the native digital funds area, as traders fret over whether or not the perennial loss-maker will ever flip a revenue.
India’s central financial institution demanded Paytm instantly cease enrolling new prospects on Friday and ordered an audit of its IT methods, citing “sure materials supervisory issues noticed within the financial institution”.
Shares within the agency closed 12.84 p.c decrease in Mumbai after hitting report lows in Monday’s commerce.
Paytm stated it “stays dedicated to working with the regulator to deal with their issues as shortly as potential”.
The agency’s troubles had been compounded over the weekend after information broke that founder and chief govt Vijay Shekhar Sharma had been briefly detained final month after crashing right into a senior police officer’s automobile within the capital New Delhi and fleeing the scene.
Paytm downplayed the incident in a Sunday assertion that characterised the accident as a “minor offence”.
Mr Sharma, named India’s youngest billionaire in 2017, launched Paytm in 2010 and shortly made the platform synonymous with digital funds in a rustic historically dominated by money transactions.
His enterprise has benefitted from authorities efforts to curb using onerous forex — together with the demonetisation of almost all banknotes in circulation 5 years in the past — and from the pandemic.
The platform had 350 million prospects on the finish of December, in line with the corporate’s regulatory submitting.
However the previous few months have seen a dramatic reversal of fortunes for the platform and Sharma has seen his internet value written down by over $1.5 billion since its November 2021 market debut.
Paytm’s father or mother One97 Communications reported a internet lack of 7.79 billion rupees ($102 million) for the December quarter.
(This story has not been edited by NDTV workers and is auto-generated from a syndicated feed.)