Paytm shares dropped over 4% on Monday following reports of Sebi issuing show-cause notices to Vijay Shekhar Sharma and board members over alleged misrepresentation during its IPO.
Photograph: Francis Mascarenhas/Reuters
New Delhi, Aug 26 (PTI) Shares of One97 Communications Ltd, which owns the Paytm brand, on Monday dropped over 4 per cent amid reports that Sebi has issued show-cause notices to Vijay Shekhar Sharma and board members who served during its IPO in November 2021 for alleged misrepresentation of facts.
The stock tanked 4.41 per cent to settle at Rs 530.05 apiece on the BSE. During the day, it plunged 8.88 per cent to Rs 505.25.
On the NSE, shares of the firm dropped 4.47 per cent to Rs 530. Intra-day, the stock tumbled 8.88 per cent to Rs 505.55.
The company's market valuation declined by Rs 1,534.23 crore to Rs 33,731.56 crore.
Earlier in the day, BSE sought clarification from One 97 Communications Ltd with reference to news that Vijay Shekhar Sharma, Paytm directors face Sebi show-cause notices over initial public offering (IPO) breaches.
According to the company filing on Monday, markets regulator Sebi has issued notice to fintech firm One97 Communications in the March 2024 quarter on employee stock options given to its MD and CEO Vijay Shekhar Sharma.
In response to a query from stock exchanges, Paytm said the notice is not a new development, and it is in regulatory contact with the markets regulator to make required representations.
According to Paytm's financial year 2024 annual result filing, it had issued 2.1 crore employee stock options (ESOP) to Sharma in the financial year 2022.
Sebi had issued a show cause notice to Paytm on ESOP issued to Sharma.
"This is not a new development, as the company had already made relevant disclosures on this matter in its financial results for the quarter and year ended March 31, 2024, as well as the quarter ended June 30, 2024. The company is in regular communication with the Securities Exchange Board of India (Sebi) and making necessary representations regarding this matter," Paytm said in response to a stock exchange query.
The disclosure made on May 22 and July 19 said that Paytm has submitted its preliminary response and is in the process of seeking further information from the regulator in this regard.
"Based on an independent legal opinion obtained by the management, it believes that the company is compliant with the relevant regulations. Accordingly, there is no impact on the financial results for the year ended March 31, 2024," the filing said.
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