Shares of One97 Communications, which operates Paytm were locked in 5 percent upper circuit at Rs 370 per share on March 15 after the National Payments Corporation of India (NPCI) granted the company to function as a third-party application provider (TPAP) on Unified Payments Interface (UPI). In response, Morgan Stanley analysts shared an 'equal-weight' call on the counter with a target price of Rs 555, implying an upside of 57 percent from current level.
Recently, Paytm's stock has been hitting lower circuits day after day due to the RBI's ban on Paytm Payments Bank from conducting certain operations. However, market participants could see some respite now that NPCI has given users the green light to transact using UPI on the app.
So far this year, Paytm stock has crashed over 44 percent. It had also hit record low of Rs 318 per share on February 16, 2024.
Follow our live blog for all the market action
A TPAP will help with UPI payments using mobile wallets, store apps, or any other system that uses UPI for payments. NPCI runs the UPI platform. TPAPs use UPI's setup and cooperate with payment service providers (PSPs) and banks to handle transactions.
The NPCI approval comes a day before RBI restrictions on Paytm Payments Bank kick in. Four banks - SBI, Axis Bank, HDFC Bank, and YES Bank will act as payment service providers to Paytm.
ALSO READ: Paytm gets NPCI nod to become a third-party UPI app
Analysts at Morgan Stanley view this move as a positive development and in line with expectations. "We will continue to await an update on the potential impact on the company's businesses during February 2024. We await updated commercials for the company as Paytm Payments Bank's business moves to other banks," the brokerage firm said.
Meanwhile, the NPCI has advised Paytm to migrate all existing handles and mandates to new PSP banks at the earliest. A PSP bank, using its app or another service, helps customers sign up for UPI. This links their bank accounts to their UPI IDs.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
