New Delhi: Continuing its winning streak for the third consecutive day, shares of One 97 Communications, the parent company of Paytm, soared by 8.60 percent in early morning trade, crossing the Rs 400 mark for the first time in 8 weeks to reach Rs 414. This rally marks a 33.54 percent gain from its recent all-time low of Rs 310, recorded in the second week of May.
The company's shares hit the 10 percent upper circuit limit, following a 2 percent gain in the previous session. Stock exchanges recently raised Paytm's upper circuit limit to 10 percent, initially reduced to 5 percent due to significant volatility stemming from the RBI's restrictions on Paytm Payments Bank.
The surge in Paytm's stock price comes amidst encouraging signs of recovery and strong stabilization in its Unified Payments Interface (UPI) business. In May, UPI transactions processed on the Paytm platform surged to Rs 1.24 trillion, driven by various initiatives such as Credit Card on UPI and UPI Lite.
Total transactions on the platform stabilized at 1.14 billion in May, reinforcing Paytm's position as the third-largest player in market share since becoming a Third-Party Application Provider (TPAP) in March. Additionally, Paytm's extensive merchant base has contributed to its leadership in peer-to-merchant (P2M) UPI transactions.
May 2024 marked a significant milestone for UPI, handling nearly 14 billion transactions, representing a substantial 49 percent year-on-year increase. These transactions amounted to Rs 20.45 trillion, the highest since its launch in 2016, indicating the growing preference for digital payments among Indian consumers and businesses.
Paytm's bullish approach towards UPI is evident through its partnerships with various banks and financial institutions, including Axis Bank, HDFC Bank, State Bank of India (SBI), and YES Bank, aimed at enhancing its UPI service.
Despite regulatory challenges, Paytm's performance is on an upward trajectory. In the face of the RBI's ban on certain transactions related to its payments bank, Paytm reported a widened loss of Rs 550 crore for the fourth quarter of the financial year 2023–24, compared to Rs 167.5 crore in the same period the previous year. However, for the year ended March 31, 2024, the company's loss narrowed to Rs 1,422.4 crore from Rs 1,776.5 crore in the previous fiscal year. Paytm's annual revenue also saw a significant increase of approximately 25 percent, reaching Rs 9,978 crore for FY24, up from Rs 7,990.3 crore in FY23.
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