Shares of One97 Communications, the parent company of Indian payments platform Paytm, reached a record low on Monday due to regulatory restrictions imposed on its affiliate bank. The Reserve Bank of India recently took action against Paytm Payments Bank, resulting in a 42% decline in the value of One97 Communications shares over the past three days.
One97 Communications addressed media reports and social media speculation on Sunday, asserting that neither the company nor its CEO are under investigation by anti-money-laundering officials. It expressed its commitment to compliance and clarified that the RBI's actions are part of an ongoing supervisory engagement and compliance process.
The downward trend in One97's shares began after the central bank instructed Paytm Payments Bank to cease onboarding new customers due to noncompliance with financial regulations and supervisory concerns. While the bank will no longer be allowed to accept additional deposits or process credit transactions, customers can still withdraw their funds.
Citi Research, meanwhile, downgraded One97 to a sell rating last week, citing weak business outlook and ongoing challenges faced by Paytm. The uncertainties surrounding the company are anticipated to persist until at least the first quarter of fiscal year 2025.
By Kimberley Kao