Paytm shares nosedived amid reports that the company and seven other payment gateways are under the ED scanner in a crypto scam.
Shares of One97 Communications, which owns payments platform Paytm, tumbled nearly 9% in intraday trade today amid reports that the fintech major is among the eight payment gateways facing Enforcement Directorate (ED) probe in a cryptocurrency scam. As per reports, Paytm, Razorpay, PayU, Easebuzz, and five other payment platforms are under the ED’s scanner, and the law enforcement agency has frozen around ₹500 crore in connection with the crypto scam over the last two years.
Reacting to the news, shares of Paytm declined 8.8% to hit an intraday low of ₹773.90 on the BSE. Early today, the fintech heavyweight opened a tad higher at ₹851 and touched a high of ₹855.45 before the exchange sought clarification on crypto scam. Finally, the stock ended 5.2% lower at ₹804.80 apiece after it issued a clarification on the matter.
In an exchange filing at around 10:38 AM, Paytm said that the exchange has sought clarification from One97 Communications with reference to scam news that appeared in certain media agencies. An hour later at 12 pm, the co-founder and chief executive officer (CEO) Vijay Shekhar Sharma-led company issued a statement, clarifying that the published report is “factually incorrect and misleading”.
“We confirm that we have not received any such new notice, communication, or query from the Enforcement Directorate regarding the matter mentioned in the media articles,” it said in the BSE filing.
The company claimed that the information published is factually incorrect and misleading and it didn’t receive any query from the media prior to the publishing of this news article.
Citing a letter dated September 4, 2022, regarding the ED search operations involving certain merchants for whom it provided payment processing solutions, the company said that the current instances pertain to similar old enquiries regarding third- party merchants. “We would like to clarify that these merchants are independent entities and are not part of our group. We confirm that we had fully cooperated with the authorities and had complied with all their directives.”
Paytm further clarified that contrary to media reports “there has been no probe on the company or its subsidiaries, the ED’s probe is on third-party merchants”.
“We urge investors and stakeholders not to rely on unverified media reports and assure you that should any material developments occur, we will promptly disclose the same in accordance with SEBI Regulations, 2015,” it added.
Following this clarification, shares of Paytm pared half of day’s losses and were trading 4.3% lower at ₹812.45, with a market capitalisation of ₹51,796 crore.
In the past nine months, Paytm shares staged a smart recovery, rebounding 242% from its 52-week low of ₹310 touched on May 9, 2024, to hit a 52-week high of ₹1,063 on December 17, 2024. The stock had slumped to record low after a regulatory action by the Reserve Bank of India, wherein it had barred Payments Bank to onboard any new customers. The counter is currently down over 20% from its 52-week high levels as investors booked profit at higher levels.
In the recently concluded December quarter of FY25, Paytm saw its net loss narrowing to ₹208 crore, compared with ₹222 crore in the year-ago quarter. The digital payments firm posted a profit of ₹930 crore in the September quarter owing to a one-time exceptional gain after it sold its entertainment ticketing business to Zomato.
The company's revenue fell 36% year-on-year to ₹1,827 crore in Q3 FY25, as against ₹2,850 crore in the corresponding period a year ago. On a sequential basis, revenue rose 10% due to an increase in GMV (gross merchandise value), growth in subscription revenues, and an increase in revenues from the distribution of financial services.
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