On May 6, shares of Paytm dropped by more than 4.5 percent. This happened after Paytm revealed that its COO and president, Bhavesh Gupta, is resigning. Gupta’s resignation was announced through an official filing over the weekend. In his letter, Gupta mentioned that he’ll officially step down by the end of business hours on May 31, 2024.
However, he also expressed his plan to continue assisting the company in an advisory role within the CEO’s office. As of 9:38 am, Paytm shares were trading at ₹355.25 on the NSE, marking a 3.8 percent decrease. This year, the stock has fallen by 45 percent, which is a significant decline compared to the Nifty benchmark index, which has risen by almost 4 percent during the same period.
Bhavesh Gupta Resigns from Paytm Due to Personal Reasons
Bhavesh Gupta, who was the COO and president of Paytm, has decided to leave the company because of personal reasons. He believes in Paytm’s future success and thinks the company has strong leaders in its payment and financial services divisions. Paytm has accepted Gupta’s resignation, and he will officially leave the company by the end of May 31, 2024.
At 9:38 am, Paytm shares were being sold for Rs 355.25 each on the National Stock Exchange (NSE), which was 3.8 percent less than before. This year, the company’s stock has fallen by a whopping 45 percent. This is a big drop compared to the Nifty benchmark index, which has gone up by almost 4 percent during the same time.
Paytm Announces CEO Changes Amidst Bhavesh Gupta’s Resignation
Paytm has made changes in its leadership, appointing Rakesh Singh as the new CEO of Paytm Money, and Varun Sridhar as the CEO of Paytm Services Private Limited (PSPL). Both companies are subsidiaries of Paytm’s parent company, One97 Communications, and offer services like stock broking and mutual fund investments to Paytm customers.
Bhavesh Gupta’s resignation comes just before Paytm’s scheduled announcement of its March quarter results for fiscal year 2024. There’s anticipation that the results might be affected due to regulatory restrictions imposed by the Reserve Bank of India (RBI) on its associate firm, Paytm Payments Bank Ltd (PPBL).
Impact of RBI Ban on Paytm’s Lending Business
In the last quarter, Paytm saw impressive revenue growth, mainly because of its loan distribution service, which was quite profitable. The commission from this lending platform made up about 20 percent of Paytm’s total revenue and about 25 percent of its profit.
But things changed when the RBI banned Paytm Payments Bank Ltd (PPBL). As a result, Paytm had to stop giving out loans for over a month. This pause likely hurt both the company’s revenue and its profits more than expected, as discussed in an investor conference call.
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