Paytm shares lit up the NSE on Tuesday, leaping 7.3% to ₹1,742.2 before settling at ₹1,739.4. The rally came after the government announced a 0.4% merchant discount rate (MDR) on UPI person‑to‑merchant transactions.
Under the new MDR regime, transactions above ₹2,000 will incur a 0.4% fee, capped at ₹300 for amounts exceeding ₹75,000. The policy also exempts small merchants earning up to ₹1 lakh a month and keeps P2P UPI free. Analysts estimate the MDR pool could generate ₹17,000 crore for the industry, split among banks, TPAPs and payment service providers.
Emkay Capital has lifted Paytm’s target to ₹2,400 from ₹1,700, citing the recurring revenue model. It projects FY28 UPI MDR income of ₹1,120 crore for Paytm and ₹1,550 crore for Pine Labs. Goldman Sachs added that the sector could see incremental EBITDA of ₹1,400 crore in FY28.
While Paytm surged, Pine Labs shares dipped 3.2% to ₹187.64 and MobiKwik fell 2.1% to ₹196.7, reflecting mixed sentiment on the broader payment‑tech playbook.
Both firms will report Q4 earnings next month, with Paytm expected to confirm the new revenue trajectory. Investors will watch closely for guidance on the MDR impact and any shifts in transaction volume.