Paytm's shares increased by 2% on February 6 after falling by more than 1% in the morning trade due to the counter being caught in a downward circuit for three consecutive sessions while the RBI placed broad limits on its payments bank activity. One of the restrictions is that no new deposits or credit transactions can be made after February 29. The Paytm stock was up 2% from the previous close at 9.40 am, trading at Rs 447.
One97 Communications, the parent company of Paytm, saw its shares close 10% lower on February 5 and lock in the lower circuit at Rs 438.5. In the last four trading days, the shares have dropped significantly on markets, losing 41 percent of their value from Rs 761.4. The Confederation of All India Traders (CAIT) also released a recommendation advising physical retailers to switch to alternate payment methods, which only served to increase the suffering.
"The CAIT has advised customers to take proactive steps to safeguard their funds and guarantee ongoing financial transactions in response to certain restrictions enforced by the RBI. RBI limitations on Paytm might cause financial disruptions for a large number of small traders, vendors, hawkers, and women who use the app for payment, the industry organization stated on February 4. Brokers have greatly reduced their target price and the Paytm stock. Macquarie trimmed the goal to Rs 650, while Jefferies dropped it to Rs 500.
But Paytm made an effort to manage the situation by contesting the findings of an Enforcement Directorate (ED) examination, despite rumors circulating that the ED would launch an investigation if evidence of money laundering was discovered.
Keep in mind that the Paytm stock price, which was Rs 438.5 at the most recent close, has dropped well below both of the brokerage target levels. In the midst of the company's continuous problems, creator Vijay Shekhar Sharma assured staff that there would be no layoffs. In an effort to establish possible collaborations, the company is actively interacting with the Reserve Bank of India (RBI) and working with other banks.
"We don't know everything for sure... such as the precise nature of the error. However, we will shortly work things out. To find out what may be done, we will get in touch with the RBI," Sharma informed Paytm staff.
