Paytm share price slips over 7%; here is what is known so far

Shares of One97 Communications, the parent entity of fintech Paytm, declined over 7% in the afternoon session on Friday, January 23, after certain media outlets reported the discontinuation of the PIDF fund, which was a crucial tailwind for payment infrastructure service providers such as Paytm, PhonePe, BharatPe, and Pinelabs.

According to media reports, the RBI has discontinued the PIDF as of December 31, 2025, which used to provide support for fintech payment companies like Paytm for penetrating into tier 3 to tier 6 cities.

The subsidies helped the deeper penetration of payment tools like Soundbox and PoS machines in the rural areas.

What is the Payment Infrastructure Development Fund?

The Payment Infrastructure Development Fund (PIDF) is a ₹1,000 crore initiative by the Reserve Bank of India for deeper penetration of the payment ecosystem beyond tier 2 cities and urban regions.

The scheme was launched in 2021 to subsidise the deployment of payment infrastructure in Tier 3 to Tier 6 cities, Northeastern states, and PM Swanidhi/Vishwakarma beneficiaries.

The scheme was originally launched for three years but was later extended to December 31, 2025. The fund subsidised the costs of Point of Sale machines (PoS) and Sound Box by covering the majority of the costs.

How does it impact Paytm?

Paytm is one of the leading payment fintech companies operating across India and the pioneer in inventing the soundbox. The scheme proved to be a major tailwind for payment service providers like Paytm, PhonePe, and BharatPe, as the companies recovered all the capex cost of penetrating tier 3 and beyond through these subsidies. Before the scheme, the payment service providers had to incur manufacturing and marketing costs and recover them slowly.

Why are Paytm shares falling?

As highlighted above, according to the media reports, the PIDF scheme extension is not in the news, which could mean Paytm won't be able to get the support of subsidies for expanding the payment infrastructure in the tier 3 and beyond areas.

Some analysts believe the halt of subsidies could have a double-digit impact on the operating profit, making it a new headwind for the company.

What lies ahead?

To the clarification sought from Paytm, the company responded as follows.

“In the scenario that the current Scheme is not extended or replaced, we expect to significantly offset the impact over time through a combination of higher revenues and more targeted sales efforts. The amount of incentive was ₹128 crore for the six months ended September 30, 2025. At present, there is no announcement by the RBI or other authorities on extension or replacement of this Scheme”.

Despite the clarification, the company’s shares closed in red with 8.2% losses on Friday. The shares have slipped over 15% this week amid a broader market rout.