Munish Varma SoftBank managing partner resigns from Paytm, PolicyBazaar board

Munish Varma, managing partner at SoftBank, on Tuesday resigned from the board of One97 Communications, the parent firm of Paytm, PolicyBazaar. Varma was a non-executive and non-independent director on the board of the company which owns the Paytm app. Munish Varma SoftBank managing partner resigns from Paytm, PolicyBazaar board.

The resignation is in keeping with SoftBank’s stated practice of stepping down from the boards of investee companies post a listing. Following the resignation of Varma, Vikas Agnihotri, his alternate director, also stepped down, Paytm said in a stock exchange filing.

SoftBank currently holds a 17.4% stake in Paytm, recent shareholding data from BSE shows. Last week, Reserve Bank of India disallowed PayTm Bank from onboarding new customers. The central bank’s order has hurt the company’s stock price which crashed to a record low of Rs 585 on Tuesday.

The stock has plunged over 20% in the last two trading sessions and 72% against its offer price, in the IPO, of Rs 2,150. An IT audit firm will conduct a comprehensive system audit of Paytm’s IT system. ICICI Securities in a recent note, said the company would need to increase its efforts to enhance engagement with the existing user base to offset the adverse impact of embargo on new users. It said the “company may defer plan to apply for conversion into small finance bank”.

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Since its listing in November 2021, the market capitalisation of the company has declined by more than Rs 63,000 crore from Rs 1.01 lakh crore on listing day to Rs 37,924 crore on Tuesday, data from Bloomberg showed. On the other hand, the stake of retail investors has increased from 2.79% to 3.49% at the end of December.