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A Citi Research report has highlighted Paytm's strong position in India's digital payments ecosystem, despite shifts in UPI subsidy policies.
While the government has reduced the UPI incentive allocation to Rs 15 billion for FY25, Citi suggests that this move could pave the way for the introduction of Merchant Discount Rate (MDR) on large-ticket transactions, a development that may work in favor of fintech players like Paytm. The report points out that Paytm continues to maintain a stable market share of 5.3 percent in UPI transactions, reflecting its resilience in a highly competitive industry. The overall growth of UPI merchant payments remains strong, recording a 23 percent year-over-year increase in February 2025. Citi's findings suggest that Paytm's extensive merchant network and its diversified suite of financial services allow it to remain a key player in India's digital payments revolution. Citi analysts have set a target price of Rs 1,000 per share for Paytm, implying a potential upside of 31.1 percent. The report highlights that the company's strategic cost management and expansion in financial services could contribute to long-term profitability. With digital payments in India continuing to evolve, Paytm's ability to adapt to regulatory changes and explore new revenue streams positions it as one of the strongest contenders in the fintech space. Despite policy adjustments, Citi Research views Paytm as a promising investment opportunity. Its well-established user base, robust technology infrastructure, and growing financial services segment create a strong foundation for future growth. As the government considers potential MDR implementation on large transactions, Paytm could stand to benefit significantly in the years ahead. The shares of One 97 Communications Ltd ended at Rs 733.15, down 29.95 points or 3.92 per cent, dropping about 6 per cent during the trading session today. (ANI)
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