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Paytm Stock Soars Past Rs 1,900, Nears Listing Price
13 Nov
Summary
- Paytm's parent company shares surged 7.31% to Rs 1,925, a multi-year peak.
- Expectations of a new UPI merchant discount rate framework are driving the rally.
- MSCI increased Paytm's weight in its Emerging Markets Index, effective November 30.
One 97 Communications, the parent entity of Paytm, witnessed a significant surge in its share price on Thursday, climbing 7.31% to reach Rs 1,925. This marks the first time since its 2021 listing that the stock has surpassed the Rs 1,900 threshold and is now just Rs 25 below its initial listing price of Rs 1,950 on the National Stock Exchange. The stock has appreciated by over 49% year-to-date.
The recent upward trend in Paytm's stock is largely attributed to expectations of an imminent implementation of a new merchant discount rate (MDR) framework for Unified Payments Interface (UPI) transactions. Although the National Payments Corporation of India (NPCI) postponed the proposed MDR levy on certain person-to-merchant (P2M) UPI transactions over Rs 2,000 until after Diwali, Paytm is anticipated to be a major beneficiary.
Analysts project that revenue from UPI MDR could potentially reach Rs 1,160 crore for Paytm by FY28. Furthermore, MSCI has included Paytm in its November index review, raising its weight in the MSCI Emerging Markets Index, with these changes becoming effective at the close of trading on November 30.
Global brokerage Bernstein has identified Paytm as its top pick, citing the expansion of merchant lending and improved operating leverage as key drivers for future earnings growth. Bernstein has maintained an Outperform rating with a target price of Rs 2,200, forecasting a 24% compound annual growth rate for Paytm's revenue between FY26 and FY30, with substantial growth in EBITDA projected.
