Paytm tumbles 10% intraday, extends weekly losses to 12%
Paytm Share Price: Shares of One97 Communications, the parent of payments aggregator Paytm, slipped as much as 9% to end the day at Rs 1,152 on the BSE on Friday to decline four times in the past five trading sessions.
The reason behind the sudden fall, a CNBC TV-18 report stated, could be market concerns around the Payment Infrastructure Development Fund, or PIDF, a scheme aimed at incentivising the deployment of digital payment infrastructure. The scheme, which was extended until December 2025, has not yet seen any communication on a further extension beyond that date.
As per an analyst note cited by CNBC TV-18, the PIDF-linked incentives account for nearly 20% of Paytm’s operating profit. Any discontinuation of the scheme could impact companies offering digital payments and payment infrastructure services. However, these concerns remain speculative, with no official clarification from the Reserve Bank of India so far, the report added.
But the company has issued a clarification. Paytm said it has recognised incentives under the PIDF scheme in line with the Reserve Bank of India’s circular, based on qualifying expenditure incurred towards the deployment of payment acceptance devices. The incentives were linked to the rollout of payment devices, including soundboxes and EDC machines, across Tier-3 to Tier-6 centres, as well as select regions such as the northeastern states and the Union Territories of Jammu, Kashmir and Ladakh.
The company said the incentive recognised under the scheme amounted to Rs 128 crore for the six months ended September 30, 2025. It added that there has been no announcement so far by the RBI or other authorities regarding an extension or replacement of the scheme.
Paytm said that in the event the current scheme is not extended or replaced, it expects to significantly offset the impact over time through a combination of higher revenues and more targeted sales efforts.
Separately, CNBC TV-18 also reported that brokerage firm Investec has initiated coverage on Paytm with a ‘Buy’ rating and a price target of Rs 1,550 per share, indicating an upside potential of 23% from current levels. Investec said Paytm’s deep technology stack and embedded merchant relationships provide durable pricing power and create high switching costs. With most merchant acquisition already complete and a digital-first operating model, the company is positioned to benefit from strong operating leverage.
The brokerage expects scale efficiencies, along with increasing contributions from higher-margin, credit-adjacent businesses, to drive margin expansion. It forecasts a net revenue CAGR of 23% over FY26–28 and sees EBITDA margins improving to 24% by FY28, from 8% in H1FY26.
India’s domestic mutual funds pared their stake in One97 Communications Ltd., the parent of payments aggregator Paytm, during the October–December quarter. This marks the first time mutual funds have reduced their holding in the company since its stock market debut in November 2021, after steadily increasing their exposure over the past three years.
As per the latest shareholding data, mutual funds held a 14.34% stake in Paytm at the end of the December quarter, down from 16.25% at the end of the September quarter.
On the flip side, retail shareholders continued to sell the stock with their shareholding declining for the seventh quarter in a row. For retail shareholders, or those who have an authorized share capital of up to Rs 2 lakh, their shareholding in Paytm has dropped to the lowest level since September 2023.
Paytm shares tumbled as much as 10.4% in today's session to hit an intraday low of Rs 1,129 before recovering over a percent.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
The reason behind the sudden fall, a CNBC TV-18 report stated, could be market concerns around the Payment Infrastructure Development Fund, or PIDF, a scheme aimed at incentivising the deployment of digital payment infrastructure. The scheme, which was extended until December 2025, has not yet seen any communication on a further extension beyond that date.
As per an analyst note cited by CNBC TV-18, the PIDF-linked incentives account for nearly 20% of Paytm’s operating profit. Any discontinuation of the scheme could impact companies offering digital payments and payment infrastructure services. However, these concerns remain speculative, with no official clarification from the Reserve Bank of India so far, the report added.
But the company has issued a clarification. Paytm said it has recognised incentives under the PIDF scheme in line with the Reserve Bank of India’s circular, based on qualifying expenditure incurred towards the deployment of payment acceptance devices. The incentives were linked to the rollout of payment devices, including soundboxes and EDC machines, across Tier-3 to Tier-6 centres, as well as select regions such as the northeastern states and the Union Territories of Jammu, Kashmir and Ladakh.
The company said the incentive recognised under the scheme amounted to Rs 128 crore for the six months ended September 30, 2025. It added that there has been no announcement so far by the RBI or other authorities regarding an extension or replacement of the scheme.
Paytm said that in the event the current scheme is not extended or replaced, it expects to significantly offset the impact over time through a combination of higher revenues and more targeted sales efforts.
Separately, CNBC TV-18 also reported that brokerage firm Investec has initiated coverage on Paytm with a ‘Buy’ rating and a price target of Rs 1,550 per share, indicating an upside potential of 23% from current levels. Investec said Paytm’s deep technology stack and embedded merchant relationships provide durable pricing power and create high switching costs. With most merchant acquisition already complete and a digital-first operating model, the company is positioned to benefit from strong operating leverage.
The brokerage expects scale efficiencies, along with increasing contributions from higher-margin, credit-adjacent businesses, to drive margin expansion. It forecasts a net revenue CAGR of 23% over FY26–28 and sees EBITDA margins improving to 24% by FY28, from 8% in H1FY26.
India’s domestic mutual funds pared their stake in One97 Communications Ltd., the parent of payments aggregator Paytm, during the October–December quarter. This marks the first time mutual funds have reduced their holding in the company since its stock market debut in November 2021, after steadily increasing their exposure over the past three years.
As per the latest shareholding data, mutual funds held a 14.34% stake in Paytm at the end of the December quarter, down from 16.25% at the end of the September quarter.
On the flip side, retail shareholders continued to sell the stock with their shareholding declining for the seventh quarter in a row. For retail shareholders, or those who have an authorized share capital of up to Rs 2 lakh, their shareholding in Paytm has dropped to the lowest level since September 2023.
Paytm shares tumbled as much as 10.4% in today's session to hit an intraday low of Rs 1,129 before recovering over a percent.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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