Shares of this fintech company primarily engaged in providing digital payment services and financial solutions surged over 12 percent on Wednesday morning trade after receiving NPCI approval to onboard new UPI users.
Price Movement
In Wednesday’s trading session, share price of One 97 Communications Ltd (OCL), parent company of Paytm, reached an intraday high of Rs.769.90 per share, up 12 percent from the previous close of Rs.686.45 per share. Over the past six months, the stock has delivered returns exceeding 90 percent.
What happened
The initial surge in interest followed the approval from the National Payments Council of India (NPCI) for OCL to onboard new UPI users, nine months after the Reserve Bank of India halted the onboarding of any new users. However, this NPCI approval is contingent on OCL complying with the norms set by NPCI and other regulatory guidelines.
In its exchange filing on Tuesday, Paytm announced it has successfully migrated 13.5 crore UPI customers to the Paytm Third Party Application Platform (TPAP) app. Founder Vijay Shekhar Sharma emphasised during Paytm’s earnings call that UPI represents an “extraordinarily large opportunity” that is “much bigger than we currently anticipate.”
He noted that once Paytm gains ownership of customers on its platform, it can effectively cross-sell financial services and products.
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Challenges Faced
Paytm encountered challenges due to the Reserve Bank of India’s restrictions on Paytm Payments Bank Limited (PPBL), which barred onboarding new UPI users in January and February.
Since PPBL powered Paytm’s UPI service, the company had to switch to a third-party app model, partnering with Axis Bank, Yes Bank, SBI, and HDFC Bank as its payment service providers. This transition has likely resulted in a decline in Paytm’s UPI market share.
Financial Overview
Paytm announced its quarterly results on October 22. The company reported net sales of Rs.1,660 crore for Q2 FY25, marking a 34 percent decline from Rs.2,519 crore in Q2 FY24. However, profit after tax saw a significant improvement, reaching Rs.930 crore in Q2 FY25, compared to a net loss of Rs.292 crore in Q2 FY24.
About the company
One97 Communications Limited is a prominent Indian multinational technology company operating primarily under the Paytm brand, which is recognized as India’s largest digital payments platform.
The company provides a diverse range of services including digital payment solutions, commerce and cloud services, and financial services aimed at both consumers and merchants in India.
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Written by – Siddesh S Raskar
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