News

Published: February 12, 2024
Updated: February 12, 2024

Watch on Paytm today : Shares Under Scrutiny Amid Government Inspection and Board Formation

Government Inspection on Chinese Investments:

Paytm shares are set to face heightened scrutiny following reports of a government examination into Chinese investments in Paytm Payments Services Ltd. Despite Paytm Payments Bank's initial application for a license in November 2020, which was rejected by the RBI, the company refiled its application in December 2022 after a restructuring of investments from One97 Communications Ltd. An inter-ministerial committee is now assessing Chinese investments in PPSL, with a decision pending after thorough consideration.

Market Response and Share Performance:

The market reacted negatively to these developments, with Paytm shares plunging by 6.09% on Friday and 10% on Thursday. Year-to-date, the scrip has fallen by 35%. Investor sentiment appears to be impacted by the uncertainty surrounding regulatory compliance and foreign investment regulations.

Formation of Advisory Committee:

In response to these challenges, the Paytm board has announced the formation of a Group Advisory Committee chaired by former Sebi Chairman M. Damodaran. The committee's mandate includes bolstering compliance and regulatory measures. Comprising seasoned professionals like M.M. Chitale and R. Ramachandran, the committee aims to provide strategic guidance to navigate regulatory complexities.

Expertise and Leadership:

The Group Advisory Committee boasts diverse expertise, with members like M. Damodaran bringing extensive experience in corporate governance, restructuring, and regulatory leadership. Having previously chaired high-powered committees for the Government of India and RBI, Mr. Damodaran's leadership underscores Paytm's commitment to robust governance practices.

Paytm shares are at the center of attention due to government scrutiny over Chinese investments and the company's proactive measures to enhance regulatory compliance. As market dynamics evolve, Paytm's strategic initiatives, including the formation of the Group Advisory Committee, reflect its dedication to navigating regulatory challenges effectively. Investors will be closely monitoring developments in anticipation of regulatory clarity and its impact on Paytm's future trajectory.