Paytm parent One 97 Communication Ltd.'s shares slid nearly 10% to hit a more-than-three-month low in trade, reversing recent gains that followed Investec's initiation of coverage with a ‘Buy' rating and a target price of Rs 1,550. The sharp correction came as investors turned cautious over regulatory uncertainty surrounding the Payment Infrastructure Development Fund (PIDF) scheme, despite brokerages flagging potential mitigation levers.
The stock had climbed 3.48% earlier, but selling pressure emerged as the market began pricing in the risk that the Reserve Bank of India may not renew the PIDF scheme beyond December 2025.
PIDF Expiry Raises Revenue Concerns
The PIDF scheme currently supports deployment of payment infrastructure such as soundboxes and POS devices, with incentives flowing directly to companies' operating income. Paytm stands to lose nearly Rs 200 crore in annualised operating revenue if the scheme is not extended, a hit that would directly impact Ebitda.
This potential revenue loss has triggered near-term nervousness around Paytm's monetisation trajectory, particularly as soundboxes remain a key part of its merchant acquisition and engagement strategy.
Pricing Power Could Cushion The Impact
Brokerages, however, believe the impact may not be as severe as the stock reaction suggests. Since the PIDF scheme applies across the industry, any withdrawal would affect all payment players equally, opening the door for collective pricing action.
Investec noted that a modest Rs 10 per month increase in soundbox rentals, from the current Rs 100 per month, could almost entirely offset the estimated revenue loss from PIDF expiry. Emkay echoed this view, adding that part of the impact could also be mitigated by refraining from deploying unprofitable devices and by increasing subscription pricing.
Arihant Capital also struck a constructive tone, stating that while regulatory uncertainty remains an overhang, corrective pricing power across the industry keeps the medium-term outlook positive.
Brokerage Views Remain Constructive
Investec reiterated that price action remains a key lever for Paytm to protect profitability, emphasising that small changes in monthly rentals can meaningfully offset the loss of PIDF-linked incentives. Emkay highlighted that rationalisation of device deployment, coupled with higher subscription pricing, could soften the Ebitda impact.
Paytm Share Price Today
The scrip fell as much as 9.96% to Rs 1,134.50 apiece on Friday, lowest level since Oct. 1. It pared gains to trade 5.11% lower at Rs 708.80 apiece, as of 12:54 p.m. This compares to a 0.28% decline in the NSE Nifty 50 Index.
It has risen 39.44% in the last 12 months and fallen 8.85% year-to-date. Total traded volume so far in the day stood at 4.43 times its 30-day average. The relative strength index was at 59.82.
Out of 21 analysts tracking the company, 14 maintain a 'buy' rating, six recommend a 'hold,' and one suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target stands at Rs 1,441.84 indicating an upside of 24.6%.
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