One97 Communications was better known as the parent company of Paytm, a payments service adopted by both Uber and the Indian Railway Service. High-profile investors like Jack Ma’s Alibaba and Ant Group, Masayoshi Son’s Softbank, and Warren Buffett’s Berkshire Hathaway backed the company.The company has yet to make a profit. Shares in One97 are down over 70% since its debut.
The company has affirmed that its payment services will continue past March 15, the RBI's deadline for Paytm Payments Bank to cease operations. In a stock filing immediately after the RBI's order, Paytm warned the order to close Paytm Payments Bank could drag downbefore interest, tax, depreciation and amortization by up to 5 billion Indian rupees, or $60.4 million at current exchange rates. Paytm generated $55 million in EBITDA in the nine months ending December 31, 2023.
The situation reminds Singhal of earlier Indian financial scandals, many of which he covered during his career as an Indian business journalist and are featured in his book. For example, in the early 1990s, Harshad Mehta, a trader nicknamed "The Big Bull," defrauded banks to fund speculative stock market bets. In the heady environment of the time, traders like Mehta "didn't know when to say no, and withdraw," Singhal says.