Paytm shares gain 3% after company issues clarification on SEBI notice; check details

Shares of One 97 Communications Ltd, the owner of online payments platform Paytm, gained more than 3% to hit an intraday high of ₹548 apiece on the NSE on Tuesday, August 27, after the company issued a clarification regarding media reports about show-cause notices issued by the Securities Exchange Board of India (SEBI).

Paytm issued a clarification in a stock exchange filing on August 26 regarding media reports that claimed that the market regulator had issued show-cause notices to Paytm founder and Chief Executive Officer Vijay Shekhar Sharma and others who were members of the Board in November 2021 at the time of Paytm’s initial public offering (IPO). The show-cause notices have been issued for non-compliance with promoter classification norms, according to the reports.

Paytm, however, clarified that the SEBI action is ‘not a new development’. The fintech firm said that it had already made relevant disclosures regarding the matter in its financial results for the March quarter of FY24 and the June quarter of FY25.

“With reference to recent media reports, we would like to inform you that 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.

The company also said that the notice did not impact the financial results for the previous quarters ended June 30, 2024, and March 31, 2024, respectively.

Reports claimed that the probe was initiated based on inputs from the Reserve Bank of India (RBI), which examined Paytm Payments Bank earlier this year. Sharma’s classification as a promoter is under scrutiny, given that he had management control during the filing of the IPO documents. The SEBI also issued show-cause notices to the company’s directors at that time for endorsing Sharma’s stance.

Paytm shares are trading at ₹539 apiece, up 1.64% on the NSE at 10:15 am.