One 97 Communications has seen its domestic shareholding climb to 56% for the quarter ending September 2026, driven by strong buying from local mutual funds and insurance firms. This shift highlights growing confidence among Indian institutions as foreign direct investment contracted to 18.4% following large block trades. While this transition boosts local ownership, investors are currently tracking regulatory updates regarding the potential delay of the UPI Merchant Discount Rate (MDR) framework.
One 97 Communications, the company behind Paytm, saw a significant change in its shareholder pattern for the quarter ended September 2026. Domestic investors now hold 56% of the company, marking a steady shift as local mutual funds and insurance firms increased their exposure. This rise in domestic interest comes as foreign holdings dropped to 18.4% from 23.8% in the previous quarter, largely due to large block trades executed by entities associated with Elevation Capital and Resilient Asset Management BV.
Local Institutions Lead the Buying
Domestic institutional ownership reached a record 29.5% in the September quarter, up from 24.9% just three months prior. Mutual funds were particularly active, lifting their combined holdings to 21.2%. Several large entities, including Kotak Mutual Fund, SBI Mutual Fund, Axis Mutual Fund, and Sundaram Mutual Fund, disclosed stakes exceeding 1% for the first time or increased their existing positions. Insurance companies also expanded their presence, bringing their combined holding to 6.2%. This increase in local ownership is seen by many as a step toward solidifying the company’s status as an Indian-Owned and Controlled Company, which can be an important factor for operational and regulatory stability in the fintech sector.
Navigating Regulatory Uncertainty
While the ownership shift indicates institutional confidence, the stock has recently faced pressure from regulatory concerns. In early October 2026, the company’s shares experienced volatility, including a decline of up to 10% on October 8, following reports that the government might delay the rollout of the UPI Merchant Discount Rate (MDR) framework from October 2026 to January 2027.
The MDR framework is important for digital payment companies as it dictates the fees they can earn from merchant transactions. A potential delay suggests that the expected revenue boost from these fees may take longer to materialize than previously anticipated. This uncertainty regarding the timeline has created a cautious sentiment among market participants, weighing on the stock price despite the positive news regarding institutional ownership.
What Investors Should Track
Looking ahead, the most critical monitorable for shareholders is the official communication from regulators regarding the UPI MDR implementation timeline. Any clarity on when these changes will take effect will likely influence the company's revenue outlook. Beyond regulatory updates, investors will continue to assess the company’s ability to manage its operating costs and grow its core payments and financial services business in a highly competitive digital landscape.