Paytm surges 9%, hits over 7-month high on heavy volumes; up 34% in 1 month

In nine trading days since August 29, the market price of Paytm has rallied 28% after Paytm Payment Services received FDI approval. It will also resubmit its payment aggregator licence application.

Shares of One97 Communications, which owns and operates fintech platform Paytm, hit an over seven-month high of Rs 687.30 on Tuesday, as the stock soared 9 per cent on the BSE, in an otherwise range-bound market amid heavy volumes.

The stock is trading at its highest level since January 31, 2024. In the past one month, the market price of Paytm has surged 34 per cent. The stock of the fintech company has doubled, zooming 121 per cent, from its 52-week low of Rs 310 that it touched on May 9, 2024.

At 10:26 AM, Paytm was trading 8 per cent higher at Rs 679.60, as compared to the 0.05 per cent decline in the BSE Sensex. The counter has seen huge trading volumes, with a combined 19.02 million equity shares of the company changing hands on the NSE and BSE.

 

Paytm is India's leading mobile payments and financial services distribution company. As one of the first movers in India's fintec space to achieve scale, Paytm also popularised mobile QR payments in India. The company builds technologies that help small businesses with payments and commerce.

In recent quarters, Paytm has expanded into insurance, equity broking and wealth distribution, which offer significant opportunities to cross-sell these services and strengthen its position as a leading financial services distribution player.

Recently, Paytm also sold its entertainment ticketing business to food delivery platform Zomato for Rs 2,048 crore, as a part of its stated strategy to focus on its core payment/financial services business. The transaction will generate substantial profits for Paytm, with the cash proceeds further bolstering its balance sheet for future growth.

Meanwhile, since August 29, in nine trading days, the market price of Paytm has rallied 28 per cent after Paytm Payment Services Limited (PPSL), a wholly owned subsidiary of One97 Communications, said that it has received foreign direct investment (FDI) approval and will resubmit its payment aggregator (PA) licence application. With the FDI approval in place, PPSL will now proceed to resubmit its PA application.

In the meantime, PPSL will continue to provide online payment aggregation services to existing partners, it said.

Paytm’s business was impacted recently by the Reserve Bank of India's (RBI) directive on the company's associate entity, Paytm Payment Bank Ltd (PPBL) in January 2024, which affected the scale of revenue and near-term profitability of the company. “With support from the Regulator, National Payments Corporation of India (NPCI) and our Bank partners, we have now successfully transitioned the services provided by PPBL to other partner banks which enable us to continue serving our customers and merchants uninterrupted,” the company said in its FY24 annual report.

The management believes this transition will further de-risk the company’s business model and will open up more long-term monetisation opportunities with partner banks, leveraging strong customer and merchant engagement on the platform.

According to Paytm's Annual Report for financial year 2023-24 (FY24), India's payments landscape has benefitted from multiple developments over the past few years, be it innovations in mobile payments and digital infrastructure, continued regulatory support, or government initiatives to push for increased consumer and merchant acceptance.

Given the increasing shift towards a cashless economy and user preference for transacting via their mobile phones, mobile payments continue to scale rapidly. This is further boosted by the growth of digital commerce and services.

As a result, digital transactions in India surpassed Rs 3.2 trillion in FY23 and are expected to touch Rs 4 trillion by FY26, the company noted in its annual report.