Paytm stock crashes 6% after Govt approves ₹1500 Cr UPI Incentive for small transactions

Paytm Stock is in focus as it fell 5.89 percent after government approves Rs. 1,500  Crore Incentive for low-value transactions of up to Rs. 2,000. Will allocating Rs. 1,500 Crore for transactions worth 246.82 Lakh Crore be enough for India’s large UPI transactions? Check it Out

Share Price Movement

With a market capitalization of Rs. 46,600 Crore, the stock of Paytm Limited opened at Rs. 762, roughly the same level as yesterday’s close, but after opening it made a low of Rs. 718.20 down 5.89 percent. Additionally, the Yearly return for the stock is 74 percent, and the past 5-year return is -54  percent.

What’s the News

The Union Cabinet which was chaired by the Prime Minister approved the Incentive Scheme for the promotion of low-value BHIM-UPI transactions between Person to Merchant (P2M) for FY25.

Small merchants will be eligible for a 0.15 percent incentive on UPI transactions up to Rs. 2,000. The government stated that the scheme would help to complete the target of 20,000 crore UPI transactions in FY25. For large Merchants, there will be no benefits on any transaction value.

The government believes that this plan would increase the penetration of UPI in tier 3 to 6 cities, and encourage small merchants to adopt UPI further enhancing financial inclusion by increasing UPI adoption. And also support the government’s vision of a less cash economy. 

For companies operating UPI transactions, a decrease in incentives from the government will lead to a decrease in margin and affect their overall profitability.

Also read: Tata Group stock: Is Voltas a good bet ahead of the summer Season?

Financial Highlights

The company reported a 35.85 percent YoY decrease in revenue from Rs. 2,850 Crore in Q3FY24 to Rs. 1,828 Crore in Q3FY25. On a QoQ basis, the company reported an increase of 10.12 percent in revenue from Rs. 1,660 Crore in the previous quarter.

Their Net loss saw a decrease YoY from Rs. 222 Crore to Rs. 208 Crore for the same period. On a QoQ basis, the company reported a loss of Rs 208 Crore compared to a profit of Rs. 930 Crore in the previous quarter.

About the Company

Paytm (One97 Communications Limited) is India’s leading digital payments and financial services company, offering a wide range of solutions including mobile wallets, UPI payments, banking, lending, and e-commerce services. Founded in 2010 and headquartered in Noida, India, Paytm revolutionized digital transactions with its QR-based payment system and mobile app, becoming a key player in India’s cashless economy drive. 

Written By Abhishek Das

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