Paytm Shares Experience Sharp 10% Decline Following RBI Scheme Uncertainty
The equity shares of One 97 Communications, the parent entity of the popular digital payments platform Paytm, witnessed a significant downturn on Friday, plummeting by a substantial 10% during trading hours. This dramatic fall resumed a concerning downward trajectory that has been observed over recent sessions, with the stock price hitting a low of ₹1,134.85 per share on the Bombay Stock Exchange (BSE).
Market Reaction to RBI's PIDF Scheme Reports
The primary catalyst behind this sharp decline appears to be emerging reports indicating that the Reserve Bank of India (RBI) might decide against extending the Payment Infrastructure Development Fund (PIDF) scheme beyond its current expiration date of December 2025. This development has sparked considerable anxiety among investors and market analysts, leading to heightened selling pressure on Paytm shares.
It is noteworthy that Paytm's stock price has now declined in four out of the last five trading sessions, underscoring a period of sustained volatility and negative sentiment surrounding the company's financial prospects.
Understanding the PIDF Scheme and Its Implications
The Payment Infrastructure Development Fund represents a strategic initiative launched by the RBI with the objective of bolstering digital payment infrastructure across underserved and remote regions of India. The scheme operates by providing subsidies for the deployment of essential payment tools such as Point-of-Sale (PoS) devices and QR codes, thereby facilitating greater financial inclusion and digital transaction adoption.
However, the future of this scheme now hangs in the balance, as there has been no official confirmation or communication from the central bank regarding a potential extension beyond the stipulated timeline. This uncertainty has directly contributed to the market's adverse reaction.
Potential Financial Impact on Paytm's Operations
Financial experts and market analysts have highlighted that the possible discontinuation of the PIDF scheme could have a tangible negative effect on Paytm's revenue streams. Estimates suggest that the company might face an annualised operating revenue loss of approximately ₹200 crore if the scheme is not renewed.
This projected shortfall is particularly significant because it contributes directly to Paytm's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), a key metric used to assess a company's operational profitability and financial health. The potential loss underscores the scheme's importance to Paytm's business model and growth strategy in the digital payments landscape.
By 12:50 PM during the trading session, Paytm's share price had moderated slightly but remained under pressure, trading 6.14% lower at ₹1,183.50 per share on the BSE. Market participants continue to monitor the situation closely for any official updates from regulatory authorities or the company itself.
