Goldman Sachs Sees Big Gains from India's MDR Move for Paytm
Paytm's parent company One97 Communications is poised for significant earnings growth due to the introduction of Merchant Discount Rate (MDR) on UPI transactions. According to Goldman Sachs, the EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) of Paytm could see a 40% to 70% upside from the MDR announcement.
The National Payments Council of India (NPCI) announced that there will be a 0.4% MDR on transactions above ₹2,000, while Person-to-Person (P2P) transactions remain free. Goldman Sachs estimates around ₹20,600 crore of potential revenue pool for the industry from the announced UPI MDR.
In a high-end scenario, Goldman Sachs' calculations suggest an incremental EBITDA of around ₹1,400 crore in financial year 2028 for Paytm. However, competitive pressures could lead to a lower translation.