Paytm, a leading player in the Indian fintech space, has seen its shares take a tumble recently, slipping below the Rs 400 mark. This decline comes as the National Payments Corporation of India (NPCI) data indicates a drop in Paytm's UPI market share from 11% in February to 9% in March.
The decline in market share coincides with a decrease in UPI transactions processed by Paytm, from 1.3 billion in February to around 1.2 billion in March. This drop comes in the wake of the Reserve Bank of India (RBI) ordering Paytm Payments Bank to cease operations, including deposits, credit products, and digital wallets, due to non-compliance. However, NPCI has since allowed Paytm to resume UPI operations as a Third-Party Application Provider (TPAP) under the multi-bank model. Source: Times of India
Despite the recent challenges, there are some positive signs for Paytm. Domestic funds have increased their stake in the company, with a 1.17 percentage point rise in the March quarter. Mirae Mutual Fund and Nippon India Mutual Fund are among the buyers. Additionally, foreign portfolio investors (FPIs) have also shown confidence, increasing their stake by 2% in the same period, although the overall FPI holding has decreased following a stake sale by SoftBank.
Paytm is navigating through a complex landscape, facing regulatory hurdles while also dealing with market dynamics. How the company responds to these challenges will be crucial in determining its future trajectory in the Indian fintech market.