Why Alibaba-Backed Fintech Paytm Plunged 6% Today

Shares of Indian digital payments service provider Paytm, backed by SoftBank Group Corp SFTBY and Alibaba Group Holding Ltd. BABA, fell close to 6% on Friday following a proxy advisory firm's opposition to the re-appointment of its CEO and the Reserve Bank of India’s (RBI) new guidelines for digital lending apps.

The Objections: Proxy advisory firm Institutional Investor Advisory Services (IIAS) said it is against the re-appointment of Vijay Shekhar Sharma as CEO and managing director at the annual general meeting next week, Reuters reported.

"Vijay Shekhar Sharma has made several commitments in the past to make the company profitable, however, these have not played out. We believe the board must consider professionalizing the management," said IIAS, according to the report.

Also Read: Jack Ma-Backed Alibaba, Ant Financials Sell 43% Stake In Paytm

The report further stated that IIAS has also raised concerns stating Sharma's overall remuneration, estimated to be INR7.96 billion for the fiscal year 2023, was higher than that of CEOs of all the S&P BSE Sensex companies, most of which were profitable.

Paytm told investors on Thursday the latest guidelines by the RBI on increased scrutiny over digital lending apps may operationally hit its buy-now-pay-later business.

Price Action: Paytm shares were trading over 5.4% down on Friday afternoon and have lost over 40% since the beginning of the year.