Synopsis: Shares of Fino Payments Bank Limited plunged about 20% after reports linked the bank to a GST evasion probe involving online betting transactions worth nearly Rs 10,000 crore. The company later clarified that the investigation relates to certain merchants and programme managers and not the bank’s GST compliance.
Shares of Fino Payments Bank Limited witnessed sharp volatility after reports linked the bank to an ongoing investigation into alleged GST evasion related to online betting applications. Concerns over potential regulatory scrutiny and the arrest of its CEO triggered panic selling in the stock, leading to a steep fall during the trading session.
With a market cap of Rs 1,190 crore, the shares of Fino Payments Bank Ltd crashed about 20% in today’s trading session and reached a low of Rs 136. When compared to its previous day’s closing price of Rs 169.05. The shares are trading at a PE of 16.6, whereas their industry’s PE is at 19.8.
Probe into alleged GST evasion and money-laundering concerns
Fino Payments Bank shares came under intense selling pressure after reports emerged that the bank was being associated with a broadening investigation into GST evasion by online betting apps. The investigation is looking into transactions of close to Rs 10,000 crore, where the money was allegedly moved through multiple accounts and entities to make it difficult to trace. However, the authorities feel that the pattern of transactions and the movement of money could be enough to attract scrutiny under anti-money laundering regulations.
The matter received more prominence after the arrest of the CEO of Fino Payments Bank, Rishi Gupta, by the Directorate General of GST Intelligence (DGGI) in connection with the case. The case is currently pending before the Telangana High Court, which has reserved its order. Gupta’s lawyer argued that the bank only provided payment services and was not responsible for the tax compliance of the merchants or sellers on the platform. The bank also clarified that the GST demand raised by the authorities had already been paid.
It is believed that some shell companies and dummy programme managers were also involved in the process of adding merchants who were related to gaming services through improper invoices. As per the officials, this case may have the potential to open up a larger investigation if the agencies find that the money has been layered or hidden in contravention of anti-money laundering rules.
Company clarification and stock response
In response to the news, Fino Payments Bank Limited issued a clarification stating that the information that the investigation was expanded to the Prevention of Money Laundering Act (PMLA) or that it involved the Enforcement Directorate was incorrect and speculative. It also clarified that the company was not under investigation by any other authority besides the DGGI, Hyderabad. It also added that the investigation was not into the GST compliance of the company but into some of the programme managers and merchants who were associated with various banks.
It also added that the company did not indulge in gaming or betting activities directly or indirectly. It also added that the information in the news articles about court proceedings and the rejection of bail was incorrect. It also added that it was fully cooperating with the authorities and providing all the necessary information pertaining to the merchants and programme managers who were under investigation.
In response to the news, the company lost approximately 20% of its market capitalisation in the trading session. However, after the company issued its clarification to the exchanges, the company was able to regain some of its losses.
Financials
The revenue from operations for the company stood at Rs 63 crore in Q3 FY26 compared to the Q3 FY25 revenue of Rs 49 crore, up by about 28.6 per cent YoY. However, the net profit stood at Rs 12 crore in Q3 FY26, down compared to the Rs 23 crore profit in Q3 FY25.
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