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.
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:
The alleged violations are linked to certain investment transactions in these entities.
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 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.
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.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Mar 3, 2025, 9:50 AM IST
Neha Dubey
Neha Dubey is a Content Analyst with 3 years of experience in financial journalism, having written for a leading newswire agency and multiple newspapers. At Angel One, she creates daily content on finance and the economy. Neha holds a degree in Economics and a Master’s in Journalism.
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