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Paytm's stock experienced a notable 5% surge on Monday, reaching an upper circuit amidst the uncertainties surrounding Paytm Payments Bank. The stock rose to Rs 428.10 per share on the BSE, starting at Rs 420. This rebound represents a significant nearly 14% increase in Paytm shares over the past five trading sessions.
This recent rise in Paytm shares can be credited to the RBI's suggestion to NPCI to review Paytm's proposal for UPI services. With the RBI urging NPCI to evaluate Paytm's application to serve as a third-party UPI service provider, the potential for Paytm to process UPI payments with new bank support is promising.
Approval of Paytm's application to become a third-party UPI service provider would mean continued UPI services for users, ultimately enhancing Paytm's digital payment offerings. Additionally, positive developments such as RBI's possible deadline extension for Paytm Payments Bank, its collaboration with Axis Bank, and reports of compliance with foreign exchange regulations have all contributed to boosting investor confidence in Paytm.
While Paytm's stock has seen recent gains, experts and analysts caution investors due to ongoing regulatory uncertainties. Despite Morgan Stanley's "equal-weight" rating on Paytm with a target price of Rs 555, global brokerage firm Jefferies has opted not to rate the stock amidst negative news flow. Investors are advised to consult with qualified brokers or financial advisors before making investment decisions to navigate potential risks.
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