Paytm's Largest Shareholder Faces Significant Losses as Regulatory Ban Hits Stock Value

Elevation Capital, the biggest institutional investor in One 97 Communications, the parent company of Paytm, is witnessing a substantial drop in the value of its holdings due to a sharp decline in the company’s shares following a regulatory ban on its payment bank operations set to take effect on March 15.

The fund, led by Ravi Adusumalli, owns a 15% stake in One 97, which was valued at around Rs 6,100 crore in November 2022 but has now plummeted by almost 40% to Rs 3,800 crore as of Thursday’s trading session.

The Reserve Bank of India’s directive on Paytm Payments Bank, announced on January 31, has caused One 97 Communications’ stock price to nosedive by nearly 50%, leading to a significant loss in investor wealth.

Elevation Capital, which has investments in other successful startups like Swiggy, Urban Company, Unacademy, and Meesho, has refrained from selling any Paytm stock post the lock-in period following the IPO.

Industry experts speculate that Elevation’s gains will be severely impacted by the RBI ruling, although they remain positive due to their early investment in the company.

However, despite repeated attempts to reach out, Elevation Capital has not provided any comments on the matter.

Elevation has been a long-term supporter of Paytm founder Vijay Shekhar Sharma, having initially invested in the company in 2007 when it was primarily a value-added services provider. Their total investment in Paytm amounts to approximately Rs 500-520 crore. While Elevation sold shares worth over Rs 2,000 crore during Paytm’s IPO in November 2021, it has not made any further transactions since then.

In contrast, other major investors like SoftBank, Alibaba, Ant Financial, and Berkshire Hathaway have either partially or completely divested their stakes in One 97 Communications, leading to further volatility in the company’s stock price.