Shares of One 97 Communication, parent of Paytm, fell 4% in opening trade on Wednesday, extending the losing streak for the third straight session, as investors reacted to the news of Surinder Chawla resigning as Managing Director and CEO of Paytm Payments Bank (PPBL), an associate entity of Paytm. The fintech stock has declined over 7% in three sessions despite a positive broader market.
Continuing its losing streak, Paytm shares opened 1.4% lower at ₹398.75 against the previous closing price of ₹404.30 on the BSE. In the early trade so far, the largecap stock slide as much as 4% to hit a low of ₹388, while the market capitalisation dropped to ₹24,717 crore. The stock touched its 52-week low of ₹318.35 on February 16, 2024, and 52-week high of ₹998.30 on October 20, 2023.
In a post-market release on Tuesday, One 97 Communication informed exchanges that Surinder Chawla, MD and CEO of PPBL, resigned on April 8, 2024, citing personal reasons and to explore better career prospects. “He will be relieved from PPBL w.e.f. close of business hours on June 26, 2024, unless changed by mutual consent,” the Vijay Shekhar Sharma-led company informed exchanges.
The crisis-hit fintech company also informed exchanges that nearly all agreements between One 97 Communication and PPBL have been terminated as of March 1, 2024, in the backdrop of the Reserve Bank of India’s (RBI) action against the associate entity due to compliance issues. The board of PPBL has been reconstituted with appointment of ex-Central Bank of India Chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former Executive Director of Bank of Baroda Ashok Kumar Garg, and retired IAS Rajni Sekhri Sibal as independent directors.
In a separate development, exchange data showed that domestic and foreign funds raised their shareholding in the fintech company during the March quarter of the financial year 2023-24. The increase in shareholding was seen despite a 38% correction in Paytm shares during the January-March quarter after the RBI ordered PPBL to stop accepting fresh deposits in its accounts and wallets from March 15. PPBL is 51% owned by Paytm CEO Vijay Shekhar Sharma while the remaining 49% is owned by One 97 Communications.
As per the latest shareholding pattern, foreign portfolio investors hiked their stake in One 97 Communications by 2% to 20.64% in the March FY24 quarter, from 18.64% in Q3 FY24. However, foreign direct investment in the company fell to 39.77% from 45.08% at the quarter ended December 2023.
During the January-March period, mutual funds also raised their stake in the company by 1.16% to 6.15%, from 4.99% in Q3 FY24. Notably, the mutual fund shareholding in Paytm increased, but the number of funds that held stakes in the company dropped to 18 from 23 funds at the end of December last year.
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