Paytm shares tank 10% in biggest single-day drop since February 2024 on MDR clarification

Shares of One97 Communications, parent company of payments aggregator Paytm, were trading with losses of up to 10% on Thursday, June 12. The stock witnessed its biggest single-day drop since February last year.

The sharp decline in the stock price follows Finance Ministry’s clarification on reports about the possible introduction of a merchant discount rate (MDR) on Unified Payments Interface (UPI) transactions.

This clarification comes after several media articles said that MDR charges could be reintroduced.

According to global brokerage firm Morgan Stanley, this development is particularly relevant for Paytm. “Our adjusted EBITDA estimates for Paytm are above consensus, based on the assumption that the UPI take rate reverts to FY24 levels (2 basis points).”

For Paytm specifically, the UPI incentive was cut to ₹70 crore in FY25 from ₹290 crore in FY24. “If the media reports are accurate, there could be downside risk to our medium-term estimates,” the brokerage added.

Another brokerage UBS has a ‘Neutral’ rating on One97 Communications, with a price target of ₹1,000 per share.

In a post on X, the Finance Ministry reiterated that it has not introduced any MDR on UPI transactions, refuting the ongoing speculation.

The delay or non-introduction of MDR is sentimentally negative for Paytm, it said.

The brokerage added: “We build in a 1 bp contribution to Paytm’s net payment margin from either the introduction of MDR or increased incentives versus the Budget. Absent both, our FY26/27E adjusted EBITDA estimates face a downside risk of over 10%.”

Shares of One 97 Communications Ltd. are currently trading 8.28% lower at ₹880.60. On a year-to-date basis, the stock has fallen 11%.

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First Published: Jun 12, 2025 9:33 AM IST