Paytm share price jumps 6% today; here's why

Shares of One 97 Communications Ltd (Paytm) rose nearly 6 per cent on Wednesday after its wholly-owned unit, Paytm Payments Services Ltd (PPSL), secured the Reserve Bank of India’s (RBI) ‘in-principle’ nod to operate as an online payment aggregator under the Payment and Settlement Systems Act, 2007.

Following the announcement, Paytm stock gained 5.94 per cent to hit a high of Rs 1,186.50 on the BSE.

The RBI also withdrew merchant onboarding restrictions imposed on PPSL since November 2022, effective immediately. The authorisation covers only online PA operations as per the PA-PG Guidelines, with non-eligible transactions — including merchant pay-outs — barred from routing through the PA-designated escrow account.

RBI further directed PPSL to conduct a system and cyber security audit via a CERT-In empanelled auditor, a Certified Information Systems Auditor (CISA) registered with ISACA, or a DISA-qualified professional from ICAI. The audit must follow the scope outlined in RBI’s January 10, 2020 letter and comply with the July 30, 2024 Master Direction on Cyber Resilience and Digital Payment Security Controls for non-bank PSOs, as well as the April 6, 2018 circular on payment data storage.

On the business front, Paytm posted steady June-quarter results with in-line revenue and stronger profits aided by tight cost control. GMV recovery beat estimates, while monthly transacting users remained stable.

Motilal Oswal Financial Services (MOFSL) noted Paytm’s shift toward financial services and disciplined cost management is driving progress toward profitability. Contribution margin rose to 60.1 per cent in Q1. MOFSL expects a 35 per cent CAGR in disbursements over FY25–28, supported by tailwinds in unsecured lending and stable take rates. The company’s Rs 16,100 crore cash reserve also provides a cushion, though consistent performance will be key to sustaining shareholder returns.