Paytm Gets Show Cause Notice From SEBI Over ESOP Grants To CEO Vijay Shekhar Sharma

Paytm Slapped With Fines For Not Paying Stamp Duties

SUMMARY

Paytm received the show cause notice from SEBI in Q4 FY24 related to 2.1 Cr ESOP grants to founder and CEO Vijay Shekhar Sharma

Paytm has already submitted its preliminary response to the capital markets regulator and is seeking additional information from SEBI on the matter

Paytm saw its net loss widen 134% to INR 840.1 Cr in Q1 FY25 from INR 358.4 Cr in Q1 FY24

Fintech giant Paytm received a show cause notice from market regulator SEBI in relation to the 2.1 Cr employee stock options (ESOP) granted to the company’s founder and CEO Vijay Shekhar Sharma in the fiscal year ended March 2022 (FY22).

“During the previous quarter (Q4 FY24), the company had received a show cause notice (“SCN”) from SEBI related to the above options regarding compliance with SEBI SBEB Regulations,” Paytm said in an exchange filing.

Paytm has already submitted its preliminary response to the capital markets regulator and is seeking additional information from SEBI on the matter, the filing added.

However, Paytm said the action had no impact on its financial results for the quarter ended June, 2024.

The company made the disclosure with its financial statements for Q1 FY25.

The development comes days after Paytm got an administrative warning letter from SEBI over related party transactions with Paytm Payments Bank, which were conducted without due approval of either the audit committee or the shareholders.

Paytm’s net loss widened 134% to INR 840.1 Cr in the June quarter of the current financial year from INR 358.4 Cr in Q1 FY24.

Revenue from operations declined 36% in Q1 FY25 to INR 1,502 Cr from INR 2,342 Cr in the corresponding quarter last year.

Sequentially, Paytm’s consolidated net loss surged 52.6% while revenue from operations plummeted 33.7%.

Paytm’s payment business revenue, which stood at INR 900 Cr during the June quarter, took a hit due to disruption of Paytm Payments Bank Limited products, the conservative approach taken for certain businesses, and temporary disruptions in operating metrics, the company said in its earnings release.

The fintech major cut its overall spending by 11.5% to INR 2,476.4 Cr in Q1 FY25 from INR 2800 Cr in the year-ago quarter.

Shares of Paytm climbed more than 6% to INR 471.85 apiece during intraday trading on the BSE on Friday after the company announced its Q1 FY25 results. However, the stock ceded some of the gains and finished the day 3% higher at INR 458.7 apiece on the BSE.