Paytm shares surge 6% on getting NPCI nod to onboard new UPI users

Paytm parent One97 Communications (OCL) shares jumped as much as 6% to ₹729 apiece on the BSE in early today after it received approval from the National Payments Corporation of India (NPCI) to onboard new UPI users. At the time of reporting, Paytm shares were trading 3.67% higher at ₹712.50, with a market cap of ₹45,367.20 crore.

Paytm shares opened higher today at ₹715.50 against the previous close price of ₹687.30. Over the past month, the stock has gained 10.31%, while it jumped 87.80% in the last six months. On the year-to-date (YTD), the counter surged 11.24%.

The stock witnessed buying as Paytm received approval from NPCI nearly nine months after the Reserve Bank of India (RBI) restricted the addition of new customers. The Vijay Shekhar Sharma-led fintech firm has been granted approval to restart onboarding new users, contingent on adherence to NPCI’s procedural guidelines and its agreements with payment service provider (PSP) banks. Paytm's share of the UPI market fell from 13% in January to around 7% by September due to the embargo.

“Adhere to and abide by all NPCI procedural guidelines and circulars issued from time to time (including guidelines and circulars issued specifically on Risk management, Brand guidelines for App and QR, Multi-bank guidelines, TPAP Market share and Customer data),” it said in a BSE filing last evening.

In February, NPCI was advised by the RBI to review Paytm's request to function as a Third-Party Application Provider (TPAP) for UPI, with the condition that no new users be onboarded until all current users were migrated to a new handle.

By March, Paytm was allowed to continue functioning as a TPAP on UPI, with four banks—State Bank of India (SBI), Axis Bank, HDFC Bank, and YES Bank—serving as its PSPs.

PSP banks, either through their own apps or TPAPs, are responsible for registering customers on UPI by linking their bank accounts to UPI IDs. NPCI oversees the UPI ecosystem in India.

For the July-September quarter of FY25, Paytm reported a profit after tax of ₹928.3 crore, recovering from a loss of ₹290.5 crore during the same period last year. However, the company’s operating revenue decreased by 34%, totaling ₹1,660 crore compared to ₹2,519 crore in the previous fiscal year. Paytm noted that its EBITDA (Earnings before interests, tax, depreciation and amortisation) before ESOP improved by ₹359 crore quarter-on-quarter (QoQ), reaching ₹(186) crore.

Paytm's profit rose by 11% QoQ, driven by a 5% increase in gross merchandise volume (GMV), improved earnings from devices, and a 34% rise in revenue from financial services.

In Q2, Paytm finalised the sale of its entertainment ticketing business to food-tech platform Zomato. After accounting for working capital adjustments, the sale price amounted to ₹2,014 crore, resulting in gains of ₹1,345 crore.