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Investor Lessons from the Paytm crisis

Book Chapter

Authors: Vijaya Kittu Manda; Nimit Sharma

Book Name: AAROHAN 2024: Green Finance and ESG: Pathways to Sustainable Financial Ecosystems

ISBN: ISBN: 978-81-19567-47-8

Publisher: Eureka Publications, India

Editor(s): Dr. Varsha Agarwal; Dr. Sweta Kumari; Dr. Shoaib Mohammad

Book Chapter Number: 26

Publication Date: December 23, 2024

Pages: 253 - 266

Book Link on Publisher Website

Abstract: The stock price of One 97 Communications has nosedived following the banking regulator, Reserve Bank of India (RBI), restricting its associate company-Paytm Payment Bank Limited (PPBL), from its banking activities. The restrictions are a death knell and will substantially impact the company’s revenue. While some restrictions come into force from the end of February 2024, the remaining will be enforced from March 15, 2024. While the regulatory restrictions immediately hurt the investor sentiments, more negatives are in place because the company’s business gets hurt. This case study discusses the journey and how the stock became one of the biggest wealth destroyers for its investors despite being a leader in its business segment. Lessons drawn from the episode are vital for the finance students and the investor fraternity.

Keywords: fintech stocks, market expectations, investor returns.

DOI: https://doi.org/10.5281/zenodo.14550135

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