Paytm Share Price Declines Aggressively: Know What Transpired

One 97 Communications, the parent firm of Paytm, has experienced a recent sharp decline in the price of its shares. Most investors have become concerned and bewildered as to why the Paytm shares have dropped significantly within a very short period. What about knowing the recent developments in easy terms?

Why did the Paytm stock price fall?

The abrupt decline was primarily caused by a rumor regarding the government intended to implement Merchant Discount Rate (MDR) on UPI payments. MDR refers to a fee that merchants must pay whenever a customer tests digital payment. Right now, UPI payments do not charge the customer or merchants.

Finance Ministry however, stepped out and made it clear that such reports are absolutely not true. No proposal to levy any MDR on UPI transactions. By the time this clarification was made, though, the rumors had already sent panic among investors. This panic created a selling frenzy in Paytm shares and the stock price tumbled.

By How Much Has the Paytm Stock Dropped?

On Thursday, Paytm stocks tumbled by approximately 10%. This is actually one of the largest single day falls of Paytm since February 2024. The stock has already declined by approximately 8 percent over the last several days.

The stock was trading between 888 and 864 levels in the trading hours. Paytm today was the largest loser in NIFTY MIDCAP 150 index as well.

What Do Technical Charts Say?

Paytm stock has some support at 900 to 880 levels according to stock market experts. Should the stock drop to below 880 and remain there, then it can continue to decline to the 820 levels or even 815 levels. Traders are warned to remain cautious and observe these key price levels.

Is there cause of alarm among Investors?

To the long-term investor, these short-term fluctuations can cause panic, yet one should always look at the big picture, and that is the performance of the company and its ability to grow in the future. One dismal trading day cannot alter the business model of Paytm as it remains a market leader in digital payments in India.

But a new investor would always do good by studying the risks before making any purchase decision, more so when the prices of the stocks are highly volatile.

Also Read : Yes Bank Latest News: Share Price Swings, Fundraising & SMBC Deal Explained for Investors

Summary

• The shares diped on misplaced rumors involving MDR charges on UPI payments.
• The Finance Ministry voiced no such plan.
• Paytm stock tumbled around 10 percent on Wednesday and more than 8 percent in the past few days.
• Technical support is in the range of 900-880; a breakdown can push the stock down to 815.
• Investors must remain cautious and emphasis on long-term fundamentals.

Final Thoughts

Even rumors can produce a sharp response of the stock market. One should always wait to have official confirmations before responding to such news. The abrupt downfall of Paytm demonstrates that the market can be very delicate. The recommendation to the investors is to remain updated and not to take decisions out of panic.