Friday, Jan 23: Shares of One 97 Communications (Paytm) erased early gains and slipped sharply from the day’s highs after a key regulatory tailwind ended. The stock was trading at Rs 1,198.80 at 11:52 AM (IST), down 4.89% or Rs 61.70 for the day, compared with the previous close of Rs 1,260.50. The session also saw the stock open at Rs 1,261.90, before sentiment turned materially weaker.
Paytm stock check (as of 11:52 AM IST, Jan 23)
| Particulars | Value |
|---|---|
| Last traded price | Rs 1,198.80 |
| Change | -4.89% (-Rs 61.70) |
| Previous close | Rs 1,260.50 |
| Open | Rs 1,261.90 |
RBI’s PIDF scheme ends, turns into a major negative
The key trigger behind the sharp intraday reversal was the update that the Reserve Bank of India has ended the PIDF (Payment Infrastructure Development Fund) scheme. The scheme, which incentivised the deployment of digital payment infrastructure, ended in December 2025 and has not been extended, according to the details shared. For Paytm, this is seen as a meaningful hit to the profit bridge, as PIDF contributed 20% of operating profit, making the non-extension a notable negative for earnings expectations.
Earlier in the day, the stock had seen a positive trigger from Investec
The decline from day highs came after a contrasting start to the session, when Paytm shares had climbed over 2% following a global brokerage action. Investec initiated coverage on Paytm with a ‘Buy’ rating and a target price of Rs 1,550 per share, which had signalled improving sentiment around the company’s earnings trajectory and business fundamentals.
Investec’s note argued that Paytm is entering a structurally stronger phase of growth, supported by its technology capabilities and long-standing merchant relationships. These strengths, according to the brokerage, create high switching costs for merchants, which can translate into long-term pricing power across Paytm’s payments, commerce, and credit-adjacent offerings. Investec also flagged that this ecosystem can provide durable monetisation opportunities over the medium to long term.
Operating leverage and margin expansion were key parts of the bull case
A central point in Investec’s thesis was that Paytm has already completed the bulk of its merchant acquisition phase, which it described as an important milestone. With the merchant network largely established and a digital-first operating model in place, Investec expects incremental revenue growth to potentially convert into disproportionately higher profitability, driven by operating leverage as scale improves without a commensurate rise in fixed costs.
On the financial trajectory, Investec expects Paytm to deliver a 23% net revenue CAGR over FY26–FY28E. It also forecasts a sharp improvement in profitability, with EBITDA margins (as a percentage of net revenue) projected to expand to 24% by FY28E, from 8% in 1HFY26, aided by improving unit economics and a richer, higher-margin business mix led by credit-linked products.
Why the stock turned lower despite the earlier bullish note
While the Investec initiation provided an early lift, the session’s dominant development became the RBI’s PIDF scheme ending without an extension, which the market is treating as a bigger negative due to its stated contribution to operating profit. The shift in focus from longer-term operating leverage to near-term profit headwinds appears to have driven the sharp reversal, leaving the stock down for the day and nearly 6% off the day’s highs, as mentioned.
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