Paytm Shares Witness Sharp 10% Decline on Friday Trading
The stock price of One97 Communications Ltd, the parent company of the popular payments app Paytm, experienced a significant downturn on Friday, falling almost 10% to hit an intraday low of Rs 1,134 on the Bombay Stock Exchange (BSE). This decline marks a continuation of downward momentum, with the stock registering losses in four of the last five trading sessions, reflecting growing investor apprehension.
Market Performance Details
At 3:17 pm, the stock was trading at Rs 1,135.90 on the National Stock Exchange (NSE), down by 124.60 points or 9.88%. On the BSE, the share price dropped by 125.05 points or 9.92%, reaching Rs 1,135.85. This sharp fall has drawn attention from market analysts and investors alike, prompting a closer examination of the underlying factors driving this volatility.
Concerns Over Payment Infrastructure Development Fund (PIDF) Scheme
According to a report by CNBC TV-18, the primary reason behind this steep decline is growing uncertainty surrounding the Payment Infrastructure Development Fund (PIDF) scheme. This government initiative supports the rollout of digital payment infrastructure across India and was recently extended until December 2025. However, there has been no official communication regarding any further extension beyond that date, leading to market speculation.
An analyst note cited in the report highlighted that incentives linked to the PIDF scheme contribute nearly 20% of Paytm's operating profit. The note further cautioned that any potential discontinuation of the scheme could adversely impact companies engaged in digital payments and payment infrastructure services. It is important to note, however, that these concerns remain speculative at this stage, as the Reserve Bank of India (RBI) has not issued any official clarification on the matter.
Paytm's Clarification on PIDF Incentives
In a clarification cited by ET, Paytm stated that it has recognized incentives under the PIDF scheme in accordance with the RBI's circular, based on qualifying expenditure incurred towards deploying payment acceptance devices. The company explained that these incentives are tied to the installation of devices such as:
- Soundboxes
- EDC machines
These installations are focused on Tier-3 to Tier-6 centres, along with select locations including the northeastern states and the Union Territories of Jammu, Kashmir, and Ladakh.
The company revealed that incentives recognized under the scheme stood at Rs 128 crore for the six months ended September 30, 2025. Paytm further clarified that there has been no announcement by the RBI or other authorities regarding an extension or replacement of the PIDF scheme. The company expressed confidence that if the current scheme is not extended or replaced, it expects to significantly offset the impact over time through a combination of:
- Higher revenues
- More targeted sales efforts
Mutual Funds Reduce Stake in Paytm
Meanwhile, the company's latest shareholding pattern revealed that domestic mutual funds reduced their stake in One97 Communications during the October–December quarter. This marks the first time mutual funds have trimmed their holding since Paytm's stock market debut in November 2021, after consistently increasing their exposure over the past three years.
According to shareholding data, mutual funds held 14.34% in Paytm at the end of the December quarter, compared with 16.25% at the end of the September quarter. This reduction in institutional investment adds another layer to the current market sentiment surrounding the company.
The combination of PIDF scheme uncertainty and changing investor patterns has created a challenging environment for Paytm's stock, with market participants closely monitoring developments from both the company and regulatory authorities.
