Paytm shares surge on getting NPCI nod to add new UPI users

Shares of One97 Communications, the parent company of Paytm, surged by more than 8% today, climbing from ₹720 to ₹745. This boost comes in response to the National Payments Corporation of India (NPCI) granting permission for Paytm to onboard new UPI users. The company also reported positive results for its second-quarter operations, which further contributed to the stock's rise.

RBI's restriction on Paytm

Earlier this year, the Reserve Bank of India imposed restrictions on Paytm Payments Bank Limited (PPBL), preventing it from adding new UPI users—a setback that raised concerns about the company's growth prospects. However, the NPCI's recent decision to allow new user registrations is seen as a significant relief for Paytm.

New UPI users can be added now

In March, the NPCI had permitted Paytm to participate in UPI as a third-party application provider, allowing transactions through four banks: SBI, Axis Bank, HDFC Bank, and Yes Bank. The NPCI clarified that new UPI customers can now be added under the terms established between third-party providers and payment service providers.

Bloomberg reports that out of 18 analysts tracking the company, six maintain a 'buy' status while six recommend selling.

MK Global Research commented that the NPCI's decision could help Paytm expand its user base and improve overall business quality. They suggested adding shares, predicting a 10% upside from the previous day’s closing price. Conversely, Bernstein anticipates a 12% decline in share prices, setting a target price of ₹600, with expected EBITDA by FY 2027.