 "Paytm hits all-time low of Rs 317.45; stock tanks 68% from 52-week high")
Shares of One97 Communications, which owns the brand Paytm, continued to reel under pressure, hitting an all-time low of Rs 317.45 on Wednesday. Paytm stock was frozen at the 5-per cent lower circuit on the BSE at 02:37 PM, falling below its previous low of Rs 318.35 touched on February 16, 2014.
Shares of Paytm were locked in the lower circuit for a third straight day after the resignation of President and Chief Operating Officer (COO) Bhavesh Gupta, as a part of the overall organisational restructuring.
Gupta's resignation marks the third senior resignation from the company in the past few months after its associate entity, Paytm Payments Bank (Paytm PB), faced regulatory action from the Reserve Bank of India (RBI).
With the past three days' 14 per cent decline, the stock price of the company has tanked 68 per cent from its 52-week high level of Rs 998.30 touched on October 20, 2023. It had hit a record high of Rs 1,961.05 on the listing day i.e. November 18, 2021. Paytm had raised Rs 18,300 crore by issuing shares at a price of Rs 2,150 per share.
A combined 7.3 million equity shares have changed hands on the counter so far, and there were pending sell orders for around 2.7 million shares on the NSE and BSE.
The board of Paytm accepted the resignation of Gupta during a meeting held on Saturday, May 4, 2024 and will be effective from May 31.
"Bhavesh Gupta, who was overseeing the payments and lending businesses, has decided to take a career break due to personal reasons. He will be transitioning to an advisory role, offering guidance for Paytm's growth initiatives until the end of the year," Patym said in an exchange filing.
The company said it is expanding its leadership team to build a large and profitable payment and financial services distribution business. This move is aligned with its ambition to ensure Paytm's sustained growth across key business verticals, fostering innovation and strengthening its group structure for sustainability and regulatory compliance.
Paytm is India's leading mobile payments and financial services distribution company. It offers payment services, commerce and cloud services, and financial services (mainly loan distribution) to 333 million consumers and over ~20+ million merchants.
Meanwhile, in February 2024, brokerage firm Macquarie had downgraded 'Paytm' to underperform rating with a 12-month target price of Rs 275 per share driven by expectations of a sharp reduction in revenues across various segments.
Post the recent regulatory changes and diktats, Paytm now faces a serious risk of exodus of customers (overall 330 million customers and 110 million MTUs – monthly transacting users and merchant subscription network of 10.6 million) which significantly jeopardises its monetisation as well as its business model.
