Why Did Paytm Shares Crash by 10% Today? Check the Reason

Synopsis: Paytm shares fell 10% in intraday trading following concerns over the PIDF, and Domestic mutual funds trimmed their holdings in the company for the first time since its 2021 IPO. Meanwhile, Bengaluru-based PhonePe is also reportedly preparing for its own IPO.

With a market capitalization of Rs. 75,807.78 Crores on Friday, the shares of One 97 Communications Ltd declined upto 9.9 percent, reaching a low of Rs. 1134.85 compared to its previous close of Rs. 1260.90.

One 97 Communications Ltd, engaged in India’s digital ecosystem, focusing on mobile payments, financial services, and commerce are in the spotlight as it has declined in the intraday trade and the stock has also declined in four out of the last five sessions.

Reason for the Fall

The reason for this is mainly due to concerns around the Payment Infrastructure Development Fund (PIDF), which was extended only until December 2025. The scheme was implemented to encourage the deployment of payment infrastructure. 

However, it remains unclear whether it will be extended beyond December 2025. Since PIDF contributes about 20 percent of Paytm’s operating profit, uncertainty about its continuation has worried investors. 

The Payment Infrastructure Development Fund (PIDF) is a government-backed initiative aimed at promoting digital payments by supporting the deployment of electronic payment infrastructure.

By extending PIDF

• Banks and payment companies continue to get financial support to set up these terminals.
• It ensures financial inclusion, giving people in smaller towns easier access to digital payments.
• It encourages adoption of cashless transactions, which aligns with the government’s push for a less-cash economy.

Additionally, domestic mutual funds trimmed their holdings in the company for the first time since its 2021 IPO, adding to selling pressure, despite positive long-term outlooks from analysts. Mutual fund ownership now stands at 14.96% at the end of December, down from 16.25% at the end of September.

Furthermore, PhonePe Bengaluru-based company, has submitted an updated draft red herring prospectus for its highly anticipated initial public offering (IPO) to the market regulator SEBI, refining the details of its upcoming stock market debut.

In the revised draft prospectus, dated January 21, the digital payments company stated that the IPO would be a pure offer-for-sale of up to 5.06 crore shares, with no new capital being raised. The equity shares are intended to be listed on both the National Stock Exchange of India Ltd and the Bombay Stock Exchange Ltd.

Financials & Others

The company’s revenue rose by 24.23 percent from Rs. 1,659 crore in September 2024 to Rs. 2,061 crore in September 2025. Meanwhile, the Net profit from  Rs. 930 crore declined to  Rs. 21 crore during the same period.

The company has demonstrated a strong median sales growth of 24.9 percent over the last 10 years, and its debt-to-equity ratio is extremely low at 0.01, indicating minimal reliance on debt. 

One97 Communications Ltd. (Paytm) is India’s leading digital ecosystem, offering payments, financial services (loans, wealth), commerce, and cloud services, building a vast platform for consumers and merchants with its flagship Paytm app, wallet, and payments bank, aiming to digitize India’s economy with a mobile-first approach since 2000.

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