Paytm shares falls below ₹600 for first time

Shares of One97 Communications, the parent company of Paytm, tumbled again on Tuesday even as it refuted reports which claimed that its payments bank unit allegedly shared data with Chinese firms.

The stock plunged over 12% to ₹592.40 on BSE, dropping out of the 100-most valued companies listed on the exchange. It has fallen over 71.5% from its issue price of ₹2,150, taking its market cap below ₹40,000 crore.

The fresh low is also below Macquarie's bearish target price for the stock. The foreign brokerage had last month slashed its target to ₹700 on the counter.

The Vijay Shekhar Sharma-led digital payments firm's scrip has shed more than 20% in the last two trading sessions after the Reserve Bank of India (RBI) barred Paytm Payments Bank from onboarding new customers citing "material supervisory concerns".

The banking regulator had directed Paytm Payments Bank to appoint an IT audit firm to conduct a comprehensive system audit of its IT system. Onboarding of new customers by Paytm Payments Bank will be subject to specific RBI approval after reviewing the IT auditors' report , RBI said.

On Monday, a report citing anonymous sources alleged that Paytm Payments Bank (PPBL) was prohibited from registering new customers as it had allowed data to flow to foreign servers.

The company, however, denied any data leak to Chinese entities and confirmed that all data resides within India. "The company would like to update that it has been informed by its associate, Paytm Payments Bank Limited (PPBL), that the regulator has not expressed any concerns regarding data leak or access shared with any Chinese firms. PPBL's data servers are located within India and it proudly supports data localization," it said.

Refuting the accusations, a Paytm spokesperson told Fortune India, "The recent Bloomberg report on Paytm Payments Bank claiming data leak to Chinese firms is completely false and simply sensationalizing. Paytm Payments Bank is proud to be a completely homegrown bank and is fully compliant with RBI’s directions on data localisation."

Paytm clarified that RBI's order does not impact any existing customers of Paytm Payments Bank. "All existing users of Paytm UPI, Paytm Wallet, Paytm FASTag, and bank accounts can continue to use these instruments, including debit cards and net banking, for payments," it said. "Users can not, until further notice, sign up for new PPBL wallets or PPBL savings or current accounts."

The banking subsidiary of Paytm had received RBI's approval to operate as a scheduled payments bank in December last year.

The company's founder and CEO, Vijay Shekhar Sharma was arrested and subsequently bailed in February for allegedly ramming his car into the vehicle of South Delhi Deputy Commissioner of Police.