Shares of One97 Communications, the parent company of Paytm, extended their positive momentum for the fourth consecutive session. The stock soared more than 4% intra-day basis on Wednesday March 20, hitting day high of Rs 425.70 on the NSE, buoyed by robust trading volumes.
The gains came in the wake of the National Payments Corporation of India (NPCI) granting approval for Paytm to operate within the Unified Payments Interface (UPI) framework as a third-party application provider (TPAP) under the multi-bank model.
Morgan Stanley, a prominent global brokerage firm, reiterated its ‘Equal-Weight’ rating on the stock, maintaining a price target of Rs 555 per share in light of this development.
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Additionally, domestic broking firm YES Securities upgraded its outlook on Paytm for the first time since initiating coverage on the stock. The move follows a turbulent period during which the Reserve Bank of India (RBI) directed Paytm to shutter its Paytm Payments Bank (PPBL) due to compliance concerns, leading to a significant decline in the company’s share price.
Yes Securities upgraded the payments company stock to “buy” from “neutral” and raised the target price to Rs 505 from Rs 350.
The brokerage firm noted that NPCI’s approval for Paytm to participate in UPI as a TPAP within the multi-bank model will help sustain its UPI business operations.
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Under this arrangement, four major banks, including Axis Bank, HDFC Bank, State Bank of India, and YES Bank, will serve as Payment Service Providers (PSPs) to Paytm. These banks will facilitate electronic transactions between various parties using the Paytm app for payments.
The approval signifies a crucial step forward for Paytm, enabling it to maintain its foothold in the rapidly evolving digital payments landscape despite recent regulatory challenges.