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Bombay Stock Exchange (BSE) has sought a clarification from One 97 Communications, the parent of digital payments firm Paytm, regarding significant movement in share price.

The exchange did not specify what the significant movement means, but it is most likely regarding the massive slump in the stock price since the November listing, which only worsened after RBI's diktat on Paytm Payments Bank.

On Tuesday, Paytm shares hit a fresh 52-week and all-time low of 540 and closed nearly 4% lower apiece on NSE. On a year-to-date basis, the scrip has dropped nearly 60% and it is nearly 75% from its issue price of 2,150. The company's market capitalisation, at 35,273 crore, has been washed out since it sought over 1 lakh crore on debut.

BSE sought the clarification in order to ensure that investors have latest relevant information about the company their interest is safeguarded.

"The Exchange has sought clarification from One 97 Communications Ltd on March 22, 2022 with reference to significant movement in price, in order to ensure that investors have latest relevant information about the company and to inform the market so that the interest of the investors is safeguarded," BSE said, adding that the "Reply is awaited."

Paytm recently had its price target cut further by a Macquarie Capital Securities (India) Pvt. analyst who was early to predict the company’s troubles.

Macquarie’s Suresh Ganapathy cut his price estimate to 450 ($5.90) from 700, citing lower valuations for fintech companies globally. He didn’t change his earnings or revenue estimates for Paytm, which he rates underperform.

Paytm pulled off the largest-ever initial public offering in India, but has since faced many challenges. Ganapathy cited fintech regulations and stricter compliance norms as potential headwinds -- and recently, the Reserve Bank of India barred the company’s Paytm Payments Bank venture from accepting new customers, adding pressure on the stock.

The average 12-month price target among nine analysts covering Paytm is 1,203, according to data compiled by Bloomberg. Ahead of the listing, Macquarie analysts including Ganapathy initiated coverage with an underperform rating and a price target of 1,200.

The initial public offering by Paytm, had been touted by some as a symbol of India’s growing appeal as a destination for global capital, particularly for investors looking for alternatives to China.

India’s Unified Payment Interface, which allows the instantaneous transfer of funds, has an open architecture. Hence, a large user base does not necessarily make a particular service provider more competitive than others on the system, according to a note from Moody’s Investors Service.

(With inputs from agencies)

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