Paytm Share Price Falls 1%; Hit by Alleged FEMA Violation Notice

Paytm’s parent company, One 97 Communications, is under regulatory focus after the Enforcement Directorate issued a show cause notice over alleged FEMA violations amounting to ₹611 crore. The case involves investments in subsidiaries, with Paytm actively seeking legal resolution.

Details of the ED Notice to Paytm

The notice, dated February 27, 2025, pertains to specific foreign exchange rule violations identified by the ED. According to a disclosure made by Paytm to the Bombay Stock Exchange (BSE) on March 2, 2025, the company received the notice on February 28, 2025.

The ED has reportedly flagged non-compliance amounting to:

• ₹245 crore in OCL.
• ₹345 crore in Little Internet.
• ₹20.9 crore in Nearbuy India.

The alleged violations are linked to certain investment transactions in these entities.

Paytm’s Response

In its official statement, OCL has confirmed that it is seeking legal counsel to determine the appropriate course of action. The company has also assured that it is taking necessary steps to resolve the matter in line with the applicable laws and regulatory processes, as per news reports.

Moreover, Paytm clarified that the compliance issues in Little Internet and Nearbuy India stem from a period before these companies were acquired by Paytm. The fintech giant had acquired both firms in 2017, merging them into a single entity. Before the acquisition, Little Internet was backed by Tiger Global Management and Elevation Capital, securing around $50 million in equity funding.

Meanwhile, Nearbuy India, co-founded by Ankur Warikoo, had received $22 million in funding from Peak XV Partners (formerly Sequoia India).

Paytm’s Share Price Performance

Paytm’s parent company, One 97 Communications Limited, saw its share price decline by 1.80% to ₹702.10 AT 9:40 AM on the NSE as of March 3, 2025 . The stock opened at ₹700, hit a high of ₹709.60, and dipped to a low of ₹683.55.

Conclusion

As Paytm works to address the allegations, this situation underscores the importance of regulatory compliance in the rapidly evolving fintech space. The coming weeks will be critical for Paytm as it engages with legal and regulatory authorities to resolve the matter.

Investors and stakeholders will be keenly watching for updates, as any further developments could have significant implications for the company’s stock performance and overall business operations.

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