Paytm shares drop 5% hitting lower circuit amid ED scrutiny
The ED is conducting a preliminary examination of documents before it decides to launch a formal investigation into the RBI-flagged alleged irregularities at Paytm under FEMA.
Shares of owner One97 Communications fell 5% on Thursday after the Enforcement Directorate (ED) questioned its senior executives as part of preliminary examinations before a formal probe under foreign exchange rules.
According to sources, ED is conducting a preliminary examination of documents before it decides to launch a formal investigation into the RBI-flagged alleged irregularities at the fintech company under the Foreign Exchange Management Act (FEMA).
They said that ED officials have questioned senior Paytm executives and also taken submission of documents from them.
Extending its losses for the third consecutive session, Paytm shares tumbled 5% to settle at Rs 325.05 apiece—a lower circuit limit on the NSE.
On the BSE, scrip of crisis-hit One97 Communications declined 4.99% to close at Rs 325.25 per piece. The stock also hit its fresh 52-week low on both BSE and NSE.
In terms of volume trade, 1.03 crore equity shares were traded on the NSE, while 11.05 lakh shares were traded on the BSE during the day.
In broader equity markets, the 30-share benchmark BSE Sensex advanced 227.55 points or 0.32% to close at 72,050.38 points, while NSE Nifty gained 0.32% to end at 21,910.75 points.
Shares of One97 Communications also tanked 10% on Wednesday, a day after hitting the lowest trading level on Tuesday.
The ED's latest move came after the recent RBI action of barring Paytm Payments Bank from accepting deposits or top-ups in any customer account.
According to sources, some documents have been recently submitted by Paytm executives following which they were asked certain questions. Some more information has been sought.
As of now, no irregularities have been detected and a case under FEMA will only be registered once any contravention under the said law is found, they added.
An investigation under the Prevention of Money Laundering Act (PMLA) involving Paytm has already going on for some time, they said.
RBI Governor Shaktikanta Das on Monday ruled out any review of the central bank's action against PPBL, saying that its decisions are well thought out.
Paytm shares have been witnessing acute selling pressure this month, after the Reserve Bank of India (RBI), on January 31, directed PPBL to stop accepting deposits or top-ups in any customer accounts, wallets, FASTags, and other instruments after February 29.
One97 Communications holds a 49% stake in PPBL but classifies it as an associate of the company and not as a subsidiary.
Edited by Suman Singh