Shares of One97 Communications, the parent company of Paytm, rebounded nearly 6 per cent from the day’s low on Thursday, June 12, after an initial nosedive sparked by rumours surrounding Merchant Discount Rate (MDR) charges on UPI transactions. The stock, which fell to an intraday low of Rs 864.20, was seen trading around Rs 915–925 levels by early afternoon.

Investors reacted nervously in the early trade after media reports claimed that the government might be reintroducing MDR on UPI payments above Rs 3,000. This led to a panic selloff, especially since MDR contributes directly to payment aggregators' monetisation capabilities. However, the Ministry of Finance issued a swift and clear rebuttal, calling the reports “false, baseless and misleading.”

Speculation and claims that the MDR will be charged on UPI transactions are completely false, baseless, and misleading.

Such baseless and sensation-creating speculations cause needless uncertainty, fear and suspicion among our citizens.

The Government remains fully committed…

— Ministry of Finance (@FinMinIndia) June 11, 2025

This clarification reassured investors, leading to bargain buying in the counter. Analysts say that while sentiment took a hit due to the initial scare, long-term prospects for Paytm remain tied to broader policy clarity and monetisation efforts.

Brokerage house UBS earlier noted that if MDR is not reinstated or if incentives don’t rise meaningfully, Paytm’s adjusted core profits could decline more than 10 per cent in FY26 and FY27. That pessimism seemed priced in by the time the stock crashed nearly 10 per cent.

Now with the government denying MDR implementation, traders believe the risk is off the table at least for now. A section of the market is also betting that the government may come up with alternative support structures for the payments ecosystem in Budget 2025, possibly through enhanced subsidies or incentives.

Market watchers suggest that long-term investors can consider accumulating the stock on dips, especially since the stock is still well below its 52-week high. Technically, Rs 860 remains a crucial support. A sustained move above Rs 925 could open the way to Rs 960-980 levels again.

As of 1:30 PM, Paytm shares were up over 5.5 per cent from the day’s bottom, showing strong resilience and high volumes.

Paytm’s volatile Thursday underscores how sensitive the stock remains to regulatory narratives. However, the sharp bounce from day’s low also shows that a large part of the pessimism may already be baked in. Investors will now watch Budget 2025 and RBI’s roadmap on digital payments for the next directional trigger.