Shares of One 97 Communications Limited, the parent company of fintech giant Paytm (often referred to as PTM in market discussions), came under significant selling pressure today, trading around 8% lower during a volatile session. The decline was triggered by concerns surrounding the Payments Infrastructure Development Fund (PIDF) scheme administered by the Reserve Bank of India (RBI), which provides incentives for deploying digital payment acceptance devices in underserved areas.

The uncertainty stemmed from disclosures in the Draft Red Herring Prospectus (DRHP) filed overnight by Paytm's peer, PhonePe. The filing highlighted that the PIDF scheme, originally launched in January 2021 to boost payment infrastructure in Tier-3 to Tier-6 centers and northeastern states, was extended only until December 31, 2025. There has been no official announcement from the RBI regarding any extension or replacement of the scheme beyond that date, creating a lack of clarity for payment aggregators reliant on these incentives.

Analysts estimate that such incentives have been a meaningful contributor to revenue for companies in the sector. For Paytm specifically, the incentives are linked to expenditures on devices like Soundboxes and EDC machines. The company recognized approximately Rs 128 crore in incentive income under the scheme for the six months ended September 30, 2025. Broader estimates suggest that Paytm has derived close to Rs 200 crore annually in operating revenue from these RBI incentives in recent periods, which directly supports profitability.

In response to the market volatility and media reports, Paytm issued a clarification to stock exchanges. The company stated that if the current PIDF scheme is not extended or replaced, it will make all efforts to significantly offset the impact. This would be achieved through a combination of higher overall revenues and more targeted sales efforts. Paytm emphasized that it has other means to mitigate any effects from the lack of this specific support, which has been available not just to it but across the payment aggregator industry.

The PIDF scheme has played a key role in accelerating digital payments adoption in semi-urban and rural regions since its inception, with periodic renewals by the RBI—most recently extended in late 2023 to run through the end of 2025. The absence of fresh guidance from the central bank has raised questions about the future of such subsidies, which have helped offset deployment costs for merchants and fintech platforms.

Market participants will now closely watch for any updates from the RBI on whether the scheme will be renewed, modified, or discontinued entirely. In the meantime, Paytm's management remains confident in its ability to navigate the potential change through organic growth strategies.