Aug 26, 2024 03:22 PM IST
Paytm shares drop 8.88% as Sebi investigates IPO compliance; stock down 18.17% this year.
Paytm share price plunged to the day’s low ₹505.55 per share on the NSE today (August 26) after company’s founder Vijay Shekhar Sharma and board members faced show-cause notices from Sebi over IPO breaches.
The markets regulator issued show-cause notices to Vijay Shekhar Sharma and board members who served during its initial public offering (IPO) in November 2021 for alleged misrepresentation of facts, Moneycontrol reported.
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One person in the know told the outlet, “Sebi is taking the view that Sharma should have been classified as a promoter, and it was also the fiduciary duty of board members of the company to verify the accuracy of the claims made by the founder and attest the same.”
The source added, “Although Sebi has gone after directors of a company in the past, they have been mostly cases of financial fraud. This is one of the rare cases where Sebi is trying to hold the directors responsible for a potential compliance lapse, which was also not pointed out either by bankers or statutory auditors.”
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Paytm share price dropped 8.88 per cent to ₹505.55 apiece on the NSE.
This year, Paytm’s stock has dropped 18.17 per cent as per BSE. In the last one year, it gave negative returns of 41.20 per cent.
Read more: Paytm’s Vijay Shekhar Sharma faces Sebi show-cause notice over IPO breaches: Report
This comes after the Reserve Bank of India (RBI) imposed restrictions on PPB due to “persistent non-compliance and ongoing significant supervisory concerns” on January 31 this year. The RBI directed PPBL to close most of its operations, including deposits, credit products, and digital wallets, by March 15 this year.
