2 reasons why Paytm shares are in focus today

Shares of One 97 Communications (Paytm) will be in focus on Monday morning after the company denied a report suggesting that the government was inspecting Chinese investments into Paytm Payments Services Ltd. The payments bank had in 2020 applied for a licence in November 2020 under the guidelines on regulation of payment aggregators and payment gateways but it was rejected by the RBI, which asked the company to resubmit the application and comply with the Press Note 3 under FDI rules.

Paytm Payments Bank later filed the required application on December 14, 2022 after downward investment from One97 Communications Ltd (OCL) into the company as prescribed under FDI guidelines. An inter-ministerial committee, as per PTI, was now examining investments from China in PPSL and a decision would be taken on the FDI issue after due consideration and comprehensive examination, sources told the news agency.

"Since then the ownership structure has changed. The Paytm founder remains the largest stakeholder in the company. Ant Financial reduced its stake in One 97 Communications Limited (OCL) to less than 10% in July 2023. Subsequently, it does not qualify for beneficial company ownership. One 97 Communications Ltd founding promoter now holds a 24.3 per cent stake. Therefore your understanding of FDI from China in PPSL is incorrect and misleading." Paytm clarified.

Paytm shares plunged 6.09 per cent on Friday and 10 per cent on Thursday. The scrip is down 35 per cent year-to-date. 

Meanwhile, the Paytm board announced formation of a group advisory committee chaired by former Sebi Chairman M Damodaran, to work with the board in further strengthening compliance, and regulatory matters

The committee, as per Paytm, included veteran professionals like M.M. Chitale, former president of Institute of Chartered Accountants of India (ICAI) and a former governing Council Member of Banking Codes and Standards Board of India nominated by RBI. It also included banking experts like R Ramachandran, former Chairman and Managing Director of Andhra Bank

"The Group Advisory Committee will work closely with the Board. The Committee will induct additional members, as necessary. Mr. Meleveetil Damodaran, IAS (Retd.), will serve as the Chairperson of the Committee, who brings extensive experience in corporate governance, restructuring, and regulatory leadership. He has previously served as Chairman of the Securities and Exchange Board of India (SEBI), and has chaired high-powered committees for the Government of India and Reserve Bank of India (RBI) and was also elected," Paytm said.