Shares of One97 Communications Limited, the parent company of Paytm, saw a 5% jump in early trading on Monday. This surge came as Morgan Stanley maintained an equal-weight call on the stock with a target price of INR 555 per share. Currently, the stock is trading at INR 428 on the NSE.
The boost in shares follows a clarification from the Reserve Bank of India (RBI) regarding Paytm’s UPI operations. The RBI has advised the National Payments Corporation of India (NPCI) to consider Paytm’s request to become a third-party application provider for UPI payments. This move aims to ensure seamless digital payments for UPI customers using the ‘@paytm’ handle, operated by Paytm Payments Bank, and to minimize risk in the UPI system.
This development is crucial for Paytm, as it comes amid the RBI’s deadline for implementing business restrictions on Paytm Payments Bank. The RBI has directed Paytm Payments Bank to halt all deposits, credit transactions, and UPI facility after February 29, with a complete cessation of banking services, including UPI and fund transfers, by March 15.
Despite facing a downturn following the RBI’s restrictions, Paytm’s shares have rebounded, gaining over 50% since the low point in January. The positive momentum continued last week, with Paytm emerging as the biggest gainer among Indian new-age tech stocks, surging by 19.4%.
Overall, these recent developments indicate a positive trend for Paytm, as it navigates regulatory challenges and seeks to maintain its position in the digital payments landscape.