Paytm, a digital payments company in India, has experienced a significant decline in its stock market value since its initial public offering (IPO) in 2021. The company's shares have plummeted by the maximum allowed limit for two consecutive days, despite the stock market reaching new highs. Paytm's stock is down 36% since Wednesday and nearly 25% for the year. The company has faced challenges since its market debut, struggling to convince investors of its profitability amid competition from local and American tech firms. It also faced regulatory issues, with its banking arm banned from acquiring new customers by the central bank. Paytm's stock is now trading at a significantly lower price, resulting in a loss of $2 billion in market capitalization and a total company worth of $3.7 billion. The recent decline was triggered by the central bank's order for Paytm Payments Bank to cease accepting deposits and other services due to non-compliance. Paytm has been trying to reassure investors and customers, but its efforts have failed to prevent the ongoing decline. This regulatory action poses a reputational risk to Paytm's overall business and raises doubts about its future performance. The company plans to work with other banks going forward. Paytm gained widespread recognition in 2016 when the Indian government banned the country's two largest currency notes, leading to a surge in users for the Paytm app.
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