Paytm Share Price Plummets as Market Exchange Takes Big Decision
In a significant move, the stock circuit limit for One97 Communications Limited, the parent company of Paytm, has been reduced by the stock exchange. The circuit limit for Paytm shares has been decreased from 10% to 5%, resulting in increased selling pressure on the shares due to restrictions imposed by the Reserve Bank of India on Paytm Payments Bank. This has led to a continuous decline in the share price over the past few days.
Earlier, BSE and NSE had reduced the stock circuit limit or price band for Paytm shares from 20% to 10% following volatile trading in the stock. But what exactly is a share price band?
Understanding Share Price Bands
A share price band, also known as a price circuit or price limit, is a specific limit within which the price of a share can fluctuate in a single day. This limit is determined by the stock exchange. There are two types of share price bands ★upper circuit and lower circuit.
The upper circuit is the maximum price at which a stock can be traded in a day, while the lower circuit is the minimum price that allows trading of the stock in a day.
For Paytm shares, the lower circuit limit has been changed after reaching 10%. BSE issued a statement stating that the price range has been revised from the current levels starting from February 15, 2024.
On Wednesday, Paytm’s share price fell by 10% to ₹342.35, and since January 31, the stock price of Paytm has plummeted by 55% from market levels. Interestingly, the same day, RBI imposed strict restrictions on Paytm Payments Bank.
On the other hand, the stock exchange has also made changes to the price bands of other companies such as Euphoria Infotech (India), Jubilant Industries, Samrat Forgings, PC Cosma Sope, Genus Power Infrastructure, Sachmo Holdings, Seasons Textiles, and Banara Bearings and Pistons.
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