The Paytm Saga Explained
Pay Through Mobile, aka Paytm is to digital payments what Xerox is to photocopiers or what Colgate is to brushing teeth. A stock with an IPO price of over Rs. 2000, listed at 1600, went all the way down to 460, recovered some lost ground from there and then was recently dealt with a body blow by the RBI sending the stock price crashing 40% in just two trading sessions. On 31st of January this year, t he RBI instructed Paytm Payments Bank Ltd, a 49% subsidiary of the listed entity One 97 Communications Ltd, to cease further deposits, credit transactions, and top-ups on customer accounts after February 29, 2024. This move raised grave concerns about the viability of Paytm’s very business model itself. So why did the RBI do this? Is it justified in using such a high handed approach as a regulator? What will be the business impact on Paytm going forward? Can Paytm bounce back from here? More importantly, should one invest in Paytm in this downturn? Let’s answer these questions one at a tim...