Around 11:45 a.m., Paytm shares were down as much as 0.42 per cent at an intraday low of Rs 1,598.60 on the BSE.
Paytm said SEBI had issued notices to key management personnel, including Chief Executive Vijay Shekhar Sharma and Chief Financial Officer Madhur Deora. The executives have 14 days to respond, according to the company.
The regulatory action relates to the timing of disclosure of certain information and whether it constituted unpublished price-sensitive information in connection with Paytm’s corporate announcement dated December 6, 2023.
In the announcement under scrutiny, Paytm had said it would reduce the issuance of personal loans below Rs 50,000 following tighter lending norms introduced by the Reserve Bank of India (RBI).
The announcement had a significant impact on the company’s stock, with Paytm shares plunging 20 per cent in the next trading session.
The RBI had tightened rules governing consumer credit and small-value personal loans around three weeks before Paytm’s December 6 announcement, increasing capital requirements amid concerns over rapid growth in such lending.
Paytm shares had already declined around 12 per cent during the eight trading sessions preceding the announcement.
SEBI show-cause notices are issued as part of regulatory investigations and provide the persons or entities concerned an opportunity to respond to the allegations. If the regulator subsequently establishes violations, those named may face penalties or other regulatory action under securities laws.
Paytm’s disclosure of the notices does not, by itself, establish any wrongdoing by the executives.
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