SUMMARY
As of 11:10 am, the stock was trading at INR 428 on NSE
Morgan Stanley maintained an equal-weight call with a target price of INR 555 per share
The development comes as the deadline inches closer for implementation of the business restrictions imposed by the RBI on Paytm Payments Bank
Shares of One97 Communications Limited, the parent entity of Paytm, hit a 5% upper circuit during the early trading session on Monday (February 26) as Morgan Stanley maintained an equal-weight call with a target price of INR 555 per share.
As of 11:10 am, the stock was trading at INR 428 on NSE.
This comes after the Reserve Bank of India (RBI) advised the National Payments Corporation of India (NPCI) to examine Paytm’s request to become a third-party application provider for UPI payments.
As per the RBI, the directive has been issued to ensure seamless digital payments by UPI customers using ‘@paytm’ handle (operated by the Paytm Payments Bank) and minimise concentration risk in the UPI system.
“National Payments Corporation of India (NPCI) has been advised by the RBI to examine the request of One97 Communication to become a third-party application provider (TPAP) for UPI channel for continued UPI operation of the Paytm app, as per the norms,” the central bank said in a statement on Friday (February 23).
Paytm’s stock faced a downturn after January 31 when the RBI imposed stringent restrictions on Paytm Payments Bank. The RBI issued a directive restricting Paytm Payments Bank from conducting various transactions, including deposits, credit transactions, and UPI facility, after February 29.
Following a substantial decline of over 50% since January 31, the company’s shares rebounded towards the end of last week. On February 21, Paytm’s shares opened 5% higher, once again reaching the upper circuit at INR 395.25 on the BSE. The positive trend continued as Paytm shares reached the upper circuit on Friday (February 23), ultimately closing 5% higher at INR 407.60 on the BSE.
The development comes as the deadline inches closer for implementation of the business restrictions imposed by the RBI on Paytm Payments Bank.
The central bank has set a March 15 deadline for the payments bank to stop all deposits or credit transactions or top-ups in any of its customer accounts. It has also barred the payments bank from offering other banking services, such as UPI facility and fund transfers post March 15.
Indian new-age tech stocks experienced mixed performance last week, with some counters witnessing sharp gains, pushing the combined market cap of these stocks to nearly $45 Bn by the end of trading on Friday (February 23). Paytm managed to reverse the downward trend of the past three weeks and emerge as the biggest gainer last week. The Vijay Shekhar Sharma-led company’s shares surged 19.4% during the week.
