Paytm shares in focus as arm gets RBI nod to operate as a payment aggregator

Shares of One 97 Communications Ltd (Paytm) are in focus on Thursday morning after the Reserve Bank of India (RBI) granted Certificate of Authorization (COA) to Paytm Payments Services Limited (PPSL), a wholly-owned subsidiary, to operate as a payment aggregator under the Payment and Settlement Systems Act, 2007. 

Growth in such business will be reflected in the consolidated financials of the company, Paytm informed stock exchanges NSE and BSE.

"In exercise of the powers conferred upon the Reserve Bank of India by Section 7 of the Payment and Settlement Systems Act, 2007, Paytm Payments Services Limited is hereby granted Certificate of Authorisation to operate as a 'Payment Aggregator' in India with effect from November 26, 2025 as per the guidelines issued by Reserve Bank of India and subject to compliance with the terms and conditions given on the reverse of this Certificate," RBI said. 

The central bank said the authorisation is only for payment aggregation business. Paytm Payments Services Limited shall is required to adhere the provisions of the Payment and Settlement Systems Act, 2007 (PSS Act), regulations issued thereunder, and the directions / guidelines issued by the RBI from time to time.

A sum of Rs 10,000, plus applicable GST, is deposited as authorisation fee with the RBI. "The Certificate of Authorisation or a certified copy thereof shall be displayed at the main premises of Paytm Payments Services Limited (Payment System Provider) and its other offices in India," the RBI said.

The development comes after ICICI Securities upped its target price on Paytm by 17 per cent, citing the company’s substantial earnings growth potential. The domestic brokerage noted that any rise in Paytm share price would likely stem from growth in payments and loan distribution, margin expansion supported by product upgrades, an improving UPI mix skewed towards chargeable offerings, savings initiatives and operating leverage, as well as optionality from possible new offerings across postpaid, wallet and international businesses. 

ICICI Securities viewed the risk-reward as favourable and pointed to improving success in product innovation, customer and merchant retention and free cash flow maximisation. Regulatory challenges, particularly their implications for loan growth, remained the key risk, it said.

The brokerage retained its 'Buy' rating and raised its target price to Rs 1,450 from Rs 1,240 earlier.