Paytm Shares Drop 6% as Jefferies Flags Growth Concerns

Shares of

ations, the parent company of Paytm, fell 6% to Rs 718 in early trading on March 20, following a cautious outlook from global brokerage Jefferies. Maintaining its 'hold' rating with a price target of Rs 850—indicating an 11.4% upside from the previous close of Rs 763—Jefferies highlighted potential challenges ahead for the fintech giant. The stock has already declined nearly 30% year-to-date. The brokerage pointed to a significant reduction in government incentives for low-value UPI P2M transactions, which have dropped from Rs 2,500 crore to Rs 1,500 crore for FY25, slashing the incentive rate from 20 basis points to 6 basis points. If Paytm’s incentives decrease proportionally, Jefferies estimates the company’s adjusted EBITDA for FY25 could fall 50% below expectations, with FY26-27 projections potentially 20-30% lower. These factors signal a bumpy road ahead for Paytm’s growth, despite its efforts to navigate India’s competitive digital payments landscape.