India’s market regulator, SEBI, has issued a show cause notice to Paytm parent One 97 Communications concerning its December 2023 disclosure on lending changes, sparking renewed scrutiny amid falling shares and regulatory pressure.
India’s market regulator has sent Paytm parent One 97 Communications a show cause notice over the timing of a key disclosure made in December 2023, reviving scrutiny of how the company communicated a major shift in its lending business. According to a regulatory filing on the BSE, the Securities and Exchange Board of India has asked the company’s key managerial personnel to explain how the announcement was handled.
The notice centres on the company’s December 6, 2023, statement that it would scale back small loans of less than ₹50,000, most of which fell under its buy now, pay later offering. That announcement followed tighter rules from the Reserve Bank of India on unsecured lending and triggered a steep sell-off in Paytm shares, which fell by nearly 20% in a single session and later hit an eight-month low.
Paytm said in the filing that the people named in the notice were reviewing the document and intended to respond within the prescribed two-week period. The company added that no penalty had been imposed and no wrongdoing had been established, describing the case as an early-stage regulatory process in which authorities seek an explanation before deciding on any further action.
The episode formed part of a turbulent period for the company in late 2023 and early 2024. Reports at the time showed that the stock rebounded briefly after the initial shock, but the broader business model was already under pressure as Paytm shifted away from small-ticket consumer lending and moved to cut costs. Around the same period, the company also announced more than 1,000 job cuts as it sought to streamline operations and adapt to the changing lending environment.
Paytm’s shares were trading 0.4% higher at ₹1,616.8 on the NSE at 12:05 p.m., after rising as much as 0.55% intraday, the filing said. The stock is up 24.6% so far this year and 40% over the past 12 months. The company also reported stronger first-quarter results, with revenue rising 8.1% to ₹2,448 crore, net profit increasing 20% to ₹220 crore and EBITDA climbing 54% to ₹203 crore, lifting margins to 8.3% from 5.8%.
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