Paytm Shares Crash 13% After Initial Surge, Profit Booking Triggers Sell-off

• Paytm shares initially surged over 3% but later fell 14% from their intraday high, closing down 9.53% at ₹1140.75 on BSE.
• The sell-off was primarily due to profit booking despite Investec initiating coverage with a 'buy' rating and a target price of ₹1550.
• A key concern is the uncertainty surrounding the extension of the Payment Infrastructure Development Fund (PIDF) beyond December 2025, which accounts for 20% of Paytm's operating profit.
• Investec's bullish outlook is based on Paytm's strong tech capabilities, merchant relationships, and potential for high-margin credit-linked businesses.
• Paytm shares, listed at ₹2150 in November 2021, have never reached their IPO price and hit a record low of ₹310 in May 2024.

Why It Matters: Paytm shares saw a significant drop due to profit booking and PIDF uncertainty, despite a 'buy' rating from Investec.