Finance Desk – Paytm’s stock (One 97 Communications) fell sharply by 10% to ₹864.20 on Thursday during intraday trading on the BSE. This drop came after the Finance Ministry denied reports that merchant discount rates (MDR) would be charged on UPI transactions.
This is Paytm’s biggest single-day fall in the last 16 months. The last major fall was on February 2, 2024, when the stock fell 20% in one session.
At 9:32 AM, Paytm was trading 9% lower at ₹872.20, while the BSE Sensex was up by 0.16%. In just the first 17 minutes of trading, 7.35 million shares were traded on NSE and BSE combined.
This fall comes even after the stock had recovered 47% from its March 2025 low of ₹652.30.
Why the Fall Happened
Reports had earlier suggested that the government was planning to charge MDR on UPI payments above ₹3,000. However, the Finance Ministry denied these claims, calling them “false, baseless, and misleading” in a post on X (formerly Twitter).
“Speculation and claims that MDR will be charged on UPI transactions are completely false… Such baseless speculations cause needless uncertainty and fear,” the ministry said.
What is MDR?
MDR (Merchant Discount Rate) is a fee charged to merchants when customers make payments using debit or credit cards. There’s ongoing debate in India about whether such charges should apply to UPI transactions, which are currently free for users and merchants.
Paytm had earlier expected that MDR might be introduced on UPI, which would help the company earn more money from QR code payments, app usage, and UPI transactions.
Analysts’ Views
According to Motilal Oswal Financial Services (MOFSL):
If MDR is introduced, Paytm could benefit and grow its share in digital payments.
The firm said Paytm might capture 7–8 basis points of the total MDR applied.
In FY25, Paytm showed signs of recovery:
Merchant loan disbursements were healthy.
Gross Merchandise Value (GMV) showed steady recovery.
MOFSL gave a ‘Neutral’ rating on the stock.
Emkay Global also said in its FY25 Q4 update:
Paytm is expected to become profitable in FY26, thanks to:
Revenue growth in payments and financial services
Higher interest income from cash reserves
Lower expenses (like depreciation and ESOP costs)
If the MDR is reintroduced and Paytm gets its payment aggregator or wallet license, it could further boost its revenue and support the stock price.
