A relief rally in the last two days had pushed the stock over 13% higher. Investors lost patience with Paytm after founder Vijay Shekhar Sharma‘s meeting with Finance Minister Nirmala Sitharaman and RBI officials failed to yield any positive result, at least immediately.
Elevate Your Tech Prowess with High-Value Skill Courses
| Offering College | Course | Website |
|---|---|---|
| Indian School of Business | ISB Professional Certificate in Product Management | Visit |
| MIT | MIT Technology Leadership and Innovation | Visit |
| IIM Lucknow | IIML Executive Programme in FinTech, Banking & Applied Risk Management | Visit |
Investors also noticed more red flags after ET reported that securities depository CDSL is conducting an inspection of the customer verification process followed by Paytm Money, the wealth management entity run by One 97 Communications.
Small investors who chose to ride the momentum in Paytm shares seen in the last two days are now feeling trapped. Since the RBI’s diktat was out on January 31 evening, Paytm shares have lost about 41% of its value.
Analysts say averaging out your portfolio could be extremely risky at this stage till the time regulatory troubles ease out.
“We are trying to catch a falling knife, as we say in market parlance, and it is always avoidable. As far as Paytm is concerned, the RBI direction has pretty much stopped the business of the payments bank. There is a whole lot of uncertainty. There are some meetings happening, but how far if at all remedial actions are approved by the regulator is a big question mark. As things stand today, the customer confidence, partner confidence obviously for obvious reasons have eroded completely. There is a clamour amongst customers and partners to move out,” said Sudip Bandyopadhyay of Inditrade Capital.
Discover the stories of your interest
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)