One97 Communications (OCL), the parent company of Paytm, along with its subsidiaries Little Internet and Nearbuy India, has been served a show cause notice by the Enforcement Directorate (ED) for alleged Foreign Exchange Management Act (FEMA) violations totaling Rs 611 crore. The notice, issued on February 27, 2025, was disclosed in a filing to the BSE on Saturday.

The ED identified non-compliance worth Rs 245 crore in OCL, Rs 345 crore in Little Internet, and Rs 20.9 crore in Nearbuy India, linked to certain investment transactions. OCL clarified that the issues in the subsidiaries predate their acquisition by Paytm. The company, headquartered in Noida, stated it is consulting legal experts and taking steps to address the matter per regulatory norms.

Paytm acquired Little Internet and Nearbuy—hyper-local deals platforms—in 2017, merging them subsequently. Little Internet, backed by Tiger Global and Elevation Capital, had raised $50 million, while Nearbuy, co-founded by Ankur Warikoo and supported by Peak XV Partners (formerly Sequoia India), secured $22 million.

This notice follows Paytm’s recent settlement with SEBI for Rs 45 lakh over regulatory breaches, resolved weeks ago. The fintech has faced scrutiny before, notably when the RBI restricted Paytm Payments Bank’s operations in early 2024. Paytm’s shares closed at Rs 716 on the BSE on Friday, down 1.3%, reflecting investor caution amid ongoing regulatory challenges. The company’s response to the ED notice will be closely watched as it navigates this latest hurdle.