MUMBAI: The stock price of One97 Communications, which operates Paytm, crashed 9% on Monday after a report said that Sebi had issued show-cause notices to its founder-chairman Vijay Shekhar Sharma and those who were on its board when the company listed in Nov 2021. The company clarified that the notices were “not new” after trading hours.
The notices sought to clarify if Sharma was a promoter and qualified as a large shareholder during the IPO.Promoters, under Sebi rules, are not eligible to get stock options from the company.
After the news report was published late session, Paytm’s stock price on the BSE crashed from about Rs 555 to Rs 505 – a 9% loss. After that it recovered some ground to close at Rs 530, down over 4% on the day. Total traded volume in the counter also jumped to 14.2 lakh shares from its two-week average of 7.8 lakh. Later, the company said the notices were already disclosed in its FY24 annual report and June quarter financial results.
“(This) is not a new development, as the company had already made relevant disclosures on this matter in its financial results for the quarter and year ended March 31, 2024, as well as the June quarter,” it said to the stock exchanges. “The company is in regular communication with the (Sebi) and making necessary representations regarding this matter. Accordingly, there is no impact on the financial results for previous quarters ended June 30, 2024, and March 31, 2024, respectively.”
According to a release from the company, its auditor’s review report had stated that the management obtained an independent legal opinion and based on the same the company believed that it was compliant with the relevant regulations.
Earlier this year, RBI had imposed a ban on Paytm Payments Bank, an arm of the company, from offering incremental banking services. Its stock price had more than halved after the diktat and is still down 30% from its Jan 29 level of Rs 761. At current levels, the stock is trading at a quarter of the IPO price (Rs 2,150)
The notices sought to clarify if Sharma was a promoter and qualified as a large shareholder during the IPO.Promoters, under Sebi rules, are not eligible to get stock options from the company.
After the news report was published late session, Paytm’s stock price on the BSE crashed from about Rs 555 to Rs 505 – a 9% loss. After that it recovered some ground to close at Rs 530, down over 4% on the day. Total traded volume in the counter also jumped to 14.2 lakh shares from its two-week average of 7.8 lakh. Later, the company said the notices were already disclosed in its FY24 annual report and June quarter financial results.
“(This) is not a new development, as the company had already made relevant disclosures on this matter in its financial results for the quarter and year ended March 31, 2024, as well as the June quarter,” it said to the stock exchanges. “The company is in regular communication with the (Sebi) and making necessary representations regarding this matter. Accordingly, there is no impact on the financial results for previous quarters ended June 30, 2024, and March 31, 2024, respectively.”
According to a release from the company, its auditor’s review report had stated that the management obtained an independent legal opinion and based on the same the company believed that it was compliant with the relevant regulations.
Earlier this year, RBI had imposed a ban on Paytm Payments Bank, an arm of the company, from offering incremental banking services. Its stock price had more than halved after the diktat and is still down 30% from its Jan 29 level of Rs 761. At current levels, the stock is trading at a quarter of the IPO price (Rs 2,150)
