Paytm Shares Hit 3-Month Low Amid PIDF Uncertainty; Company Clarifies Impact

• Paytm shares dropped by 10% on January 23, reaching a three-month low of ₹1,134.50, and have fallen 15% in five days.
• The decline is linked to concerns over the Payment Infrastructure Development Fund (PIDF) scheme, extended until December 2025, with uncertainty about further extensions.
• If PIDF is not extended, it could impact Paytm's annual operating revenue by ₹200 crore and approximately 20% of its operating profit, affecting EBITDA.
• Paytm clarified it received ₹128 crore under PIDF for H1 FY26 and plans to mitigate future impact through higher revenue and sales efforts if the scheme isn't extended.
• Investec initiated coverage with a 'buy' rating and a target price of ₹1550, citing Paytm's strong tech, merchant relationships, and potential for margin expansion.

Why It Matters: Paytm shares fell due to PIDF extension uncertainty, but the company plans mitigation, and analysts remain optimistic.