Shares of One 97 Communications Ltd (Paytm) witnessed choppy trade in the early morning session on Monday after the company board formed a committee to work with its board to strengthen compliance following the RBI's decision against its associate entity Paytm Payments Bank.
The Paytm stock opened a gap up at ₹428.75 and surged to ₹434.80 on the BSE, up 3.4%, taking its m-cap to ₹26,578 crore. However, as the trading session progressed, the Paytm share slipped into the negative territory, down 1.04% to ₹415.60 at 9.50 AM.
The Paytm share has dipped 5.26% in the past week, while it has fallen 39.82% in the past month. In the past six months, Paytm's share has seen a 51.77% decline, while in the year-to-date and one-year period, the scrip has slipped 35.34% and 36.12%, respectively.
In contrast, the benchmark BSE Sensex is trading 0.21% down, while Nifty is also down 0.25% today.
The Board of One 97 Communications on Friday evening had formed a group advisory committee chaired by former SEBI chairman M Damodaran, to work with the Board in further strengthening compliance, and regulatory matters. "The Company’s management is committed to drive sustainable business growth while adhering to a regulatory and compliance framework," said Paytm.
The committee includes veteran professionals like M.M. Chitale, former president of the Institute of Chartered Accountants of India (ICAI) and a former governing Council Member of the Banking Codes and Standards Board of India nominated by RBI. The panel also includes banking experts like R. Ramachandran, former Chairman and Managing Director of Andhra Bank.
Paytm says Damodaran, IAS (retd.), will serve as the chairperson of the committee, who brings extensive experience in corporate governance, restructuring, and regulatory leadership. He has previously served as chairman of the Securities and Exchange Board of India (SEBI), and has chaired high-powered committees for the Government of India and Reserve Bank of India (RBI) and was also elected Chairman of the EMC of the International Organisation of Securities Commission (IOSCO).
Mukund Manohar Chitale, who is the former President of the Institute of Chartered Accountants of India (ICAI), former Chairman of the National Advisory Committee on Accounting Standards (NACAS), a former governing Council Member of the Banking Codes and Standards Board of India nominated by the RBI, and a member of the Primary Advisory Market Committee of SEBI.
Ramachandran Rajaraman is the former Chairman and Managing Director of Andhra Bank, a former Whole Time Director of Syndicate Bank, and a member of the Advisory Board at Central Vigilance Commission.
Paytm’s payment services arm, Paytm Payments Bank (PPBL), is going through a deep crisis, and its future looks uncertain amid regulatory challenges. The Reserve Bank of India (RBI) has directed Paytm Payments Bank to stop on-boarding new customers and barred the company from taking further deposits or credit transactions or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29. As per the company, the RBI’s action will likely have a worst-case impact of ₹300-₹500 crore on its annual EBITDA going forward. However, it expects to continue on its trajectory to improve its profitability.
(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)
