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Paytm's stock fell 10% after the Indian Finance Ministry denied rumors of reinstating merchant fees (MDR) on UPI transactions. The ministry called the rumors "completely false."
Shares of One97 Communications, the parent company of Paytm, plunged 10% to an intraday low of Rs 864.40 on the National Stock Exchange after the Ministry of Finance dismissed speculation about reintroducing merchant discount rate (MDR) charges on UPI transactions. The stock, however, recovered partially after the initial sell-off.
MDR is a fee paid by merchants to banks or payment service providers whenever customers make digital payments through cards or platforms like UPI. Media reports earlier this week had stirred concerns over a possible reinstatement of MDR on UPI payments, prompting a swift clarification from the Finance Ministry.
In a post on X (formerly Twitter), the ministry said, “Speculation and claims that MDR will be charged on UPI transactions are completely false, baseless, and misleading. Such speculation causes needless uncertainty, fear, and suspicion among our citizens. The Government remains fully committed to promoting digital payments via UPI.”
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The clarification came amidst heightened volatility in Paytm's stock, which has been under pressure in recent days.
Adding to the developments, One97 Communications granted 23.70 lakh equity shares to eligible employees under its Employee Stock Option Scheme (ESOP) 2019.
Paytm Q4 FY25 Results:
Paytm reported a consolidated net loss of Rs 540 crore in Q4 FY25, slightly narrowing from the Rs 550 crore loss in the corresponding period last year. Exceptional items for the quarter stood at Rs 522 crore, including a Rs 492 crore charge for accelerated ESOP expenses and Rs 30 crore for other impairments.
Commenting on the regulatory landscape, Paytm said, "The industry expects MDR on UPI for large merchants to be allowed in the near future, which will result in incremental monetisation opportunities. We will update our payment processing margin guidance once we have clarity on MDR on UPI."
Stock performance:
Paytm's stock has declined nearly 4% in the past five trading sessions, despite gaining 3.9% over the past month. Over a one-year period, however, the stock has delivered strong returns, surging 124%.
