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Why did Paytm shares surge 5% in trade today? Check out the factors working for founder Vijay Shekhar Sharma | India Business News
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Paytm share price today: Shares of One 97 Communications, the parent company of Paytm, saw a surge of 5% in trading on Monday, reaching a high of Rs 427.95 on the BSE. This increase came after the Reserve Bank of India (RBI) asked National Payments Corporation of India (NPCI) to consider Paytm’s request to become a third-party UPI provider.
Additionally, global brokerage firm Morgan Stanley gave reason to Paytm founder Vijay Shekhar Sharma to cheer by giving an equal-weight rating to the stock.
According to ET, RBI allowed Paytm to move its IPO-based payments business from Paytm Payments Bank to 4-5 other banks. It also instructed NPCI, the UPI platform operator, to review Paytm’s request to become a third-party application provider (TPAP) for the UPI channel. Approval from NPCI will enable the Paytm app to maintain UPI-based payment services.
As of 3:00 PM, the stock of One 97 Communications was trading up by Rs 427.95, representing a 4.99% increase on the BSE.
ALSO READ | Paytm Payments Bank update: RBI announces more steps for UPI customers using @paytm handle
Morgan Stanley, which acquired a 0.8% stake in Paytm for Rs 244 crore a few weeks ago during the regulatory crisis, stated that if NPCI approves TPAP, it will ensure uninterrupted UPI services for Paytm customers. The firm has kept its equal-weight rating on Paytm with a target price of Rs 555.
Trading Paytm
Anand James, Chief Market Strategist at Geojit Financial Services, mentioned that there’s a trading opportunity with Paytm while long-term structures adjust and evolve. “Our upside objective is in the region of Rs 500-550, but we should be mindful of the chances of major collapse, should we not get above Rs 430. An aggressive stance would be to have Rs 390 as the downside marker,” he stated.
The recent surge in Paytm shares occurred following RBI’s extension of the ban on Paytm Payments Bank’s primary banking/wallet operations by 15 days, except for nodal accounts. Additionally, the Enforcement Directorate (ED) found no violation of the Foreign Exchange Management Act (FEMA). Paytm’s collaboration with Axis Bank for nodal accounts is expected to ensure uninterrupted settlements for merchants and minimal disruption for customers.
ALSO READ | Paytm Payments Bank crisis: RBI releases FAQs for customers – all queries on UPI, FASTag, Paytm wallet answered; check full list
Jefferies, having placed the stock in the “Not Rated” category, opts to refrain from making any investment decisions regarding Paytm until the regulatory uncertainties dissipate.
It mentioned that without further regulatory constraints, various business scenarios may unfold based on user and merchant retention. Positive and negative risks stem from factors like revenue traction and cost management. Depending on a 10-30% attrition rate for merchants and users and a decrease in net revenues of 20-45%, the valuation could fluctuate significantly.
Bernstein has upheld an outperform rating for One 97 Communications, setting a target price of Rs 600. The brokerage expects that the company will effectively implement operational adjustments to reduce reliance on PPBL, expecting minimal long-term impact on its overall business.
Additionally, global brokerage firm Morgan Stanley gave reason to Paytm founder Vijay Shekhar Sharma to cheer by giving an equal-weight rating to the stock.
According to ET, RBI allowed Paytm to move its IPO-based payments business from Paytm Payments Bank to 4-5 other banks. It also instructed NPCI, the UPI platform operator, to review Paytm’s request to become a third-party application provider (TPAP) for the UPI channel. Approval from NPCI will enable the Paytm app to maintain UPI-based payment services.
As of 3:00 PM, the stock of One 97 Communications was trading up by Rs 427.95, representing a 4.99% increase on the BSE.
ALSO READ | Paytm Payments Bank update: RBI announces more steps for UPI customers using @paytm handle
Morgan Stanley, which acquired a 0.8% stake in Paytm for Rs 244 crore a few weeks ago during the regulatory crisis, stated that if NPCI approves TPAP, it will ensure uninterrupted UPI services for Paytm customers. The firm has kept its equal-weight rating on Paytm with a target price of Rs 555.
Trading Paytm
Anand James, Chief Market Strategist at Geojit Financial Services, mentioned that there’s a trading opportunity with Paytm while long-term structures adjust and evolve. “Our upside objective is in the region of Rs 500-550, but we should be mindful of the chances of major collapse, should we not get above Rs 430. An aggressive stance would be to have Rs 390 as the downside marker,” he stated.
The recent surge in Paytm shares occurred following RBI’s extension of the ban on Paytm Payments Bank’s primary banking/wallet operations by 15 days, except for nodal accounts. Additionally, the Enforcement Directorate (ED) found no violation of the Foreign Exchange Management Act (FEMA). Paytm’s collaboration with Axis Bank for nodal accounts is expected to ensure uninterrupted settlements for merchants and minimal disruption for customers.
ALSO READ | Paytm Payments Bank crisis: RBI releases FAQs for customers – all queries on UPI, FASTag, Paytm wallet answered; check full list
Jefferies, having placed the stock in the “Not Rated” category, opts to refrain from making any investment decisions regarding Paytm until the regulatory uncertainties dissipate.
It mentioned that without further regulatory constraints, various business scenarios may unfold based on user and merchant retention. Positive and negative risks stem from factors like revenue traction and cost management. Depending on a 10-30% attrition rate for merchants and users and a decrease in net revenues of 20-45%, the valuation could fluctuate significantly.
Bernstein has upheld an outperform rating for One 97 Communications, setting a target price of Rs 600. The brokerage expects that the company will effectively implement operational adjustments to reduce reliance on PPBL, expecting minimal long-term impact on its overall business.
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