Shares of Paytm’s parent company, One97 Communications Limited, fell over 3 per cent in early trading on Tuesday after the Enforcement Directorate (ED) issued a notice against the firm.

The ED issued notice to Paytm, its MD and its subsidiaries for alleged violation of the Foreign Exchange Management Act.

Paytm, owned by One97 Communications, saw its stock rise nearly 2% after initial losses due to an ED notice for alleged FEMA rule violations involving the company and its subsidiaries. The violations pertain to past investment transactions.

Paytm received a show cause notice from India's financial crime fighting agency on Saturday for allegedly violating the country's Foreign Exchange Management Act. The notice relates to violations relating to acquisition of two subsidiaries - Little Internet Private Limited and Nearbuy India Private Limited for the years 2015 to 2019,