Paytm Shares Tumble 10% After Finance Ministry Quashes MDR Speculation

Shares of One97 Communications, the parent entity of Paytm, plummeted as much as 10% to its intraday low of Rs 864.40 on the National Stock Exchange. The stock witnessed its biggest single-day drop on June 12 since February last year. At 10:13 am, the stock was trading 6% lower on the NSE.

The stock dipped after the finance ministry’s clarification on reports about the possible introduction of a merchant discount rate on Unified Payments Interface transactions. The ministry dismissed the possible introduction of MDRs. Banks and payment service providers like Paytm typically earn a fee known as the MDR from merchants for facilitating real-time payment processing. However, to encourage adoption of digital payments, the government had waived MDR charges.

However, several media articles and reports claimed that the government was planning to roll out MDR charges for large-ticket transactions. The Payments Council of India, which represents digital payment companies, had written to Prime Minister in March, seeking the reintroduction of MDR on UPI and RuPay debit card transactions. It recommended a 0.3% MDR on UPI payments for large merchants.

According to reports, PhonePe and Google Pay continued to dominate the space, accounting for over 80% of the UPI market share as of April.

The delay or non-introduction of MDR is sentimentally negative for Paytm, CNBC-TV18 cited a report by UBS. "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%," the brokerage added.

At its intraday low, the stock was over 129% above its 52-week low level and nearly 19% below its 52-week high level. Shares of the company have gained over 127% in the last one year, but have lost 15% in 2025 so far. The stock has gained nearly 4% in the last one month.