Paytm shares in focus today as fintech clarifies on recent reports; key details

One 97 Communications Ltd (Paytm) shares are in focus on Friday morning after the Vijay Shekhar Sharma-led denied reports that a key lending partner, Aditya Birla Finance, has invoked loan guarantees. First reported by the ET, there were several follow-up articles by other publications, including Moneycontrol, which Paytm said were factually incorrect.

“We respectfully request media outlets to refrain from inaccurate reporting and to make the necessary changes to their articles to reflect our clarifications and ensure factual integrity,” it said.

Paytm, whose shares are down 63 per cent in the last six months, said it acts as a distributor of loans and does not provide a First Loss Default Guarantee (FLDG) or other loan guarantees to lending partners.

“Therefore, the article’s claims about invoking loan guarantees due to repayment defaults by our partnered lenders are inaccurate. We continue to collaborate with multiple banks and NBFCs, ensuring a diversified lending partnership network while strictly adhering to risk and compliance. Our Personal Loans distribution business was not disrupted and continued to scale effectively,” Paytm said.

Earlier this year, the RBI disallowed a Paytm subsidiary from accepting further deposits, top-ups or credit transactions into its operated wallet or accounts. Later, Paytm received the NPCI nod to become third-party app provider for UPI. Four banks namely Axis Bank, HDFC Bank, State Bank of India and YES Bank are acting as PSP (Payment System Provider) banks to Paytm.

Paytm said its Merchant Loan business resumed at the end of March, 2024 following the completion of the “@paytm” handle transition.

“With regards to media articles on recent employee exits, we wish to emphasise that the company has a robust senior leadership structure with over 50 Senior Vice Presidents, supported by a strong management and governance framework. Leaders within this structure oversee operations and reviews across business, product, and technology,” Paytm said.

The online payments platform said all recent changes at Paytm have been aligned with pre-approved succession plans discussed with the Board in previous financial years. As part of annual performance assessment, Paytm said it would keep evaluating talent bench periodically within the context of future plans, which will result in transition of some roles and employees.

“However, it also presents an exciting opportunity to reward our high-performing talent to step into leadership roles and welcome new executives who will contribute towards the next wave of growth. We will continue to foster a dynamic environment that embraces change and empowers individuals to contribute to our continued success,” it said.