Paytm share price gains over 8.5% to cross ₹400 mark after 8 weeks, recovers 33.5% from all-time low

Extending their winning streak for the third consecutive day, shares of One 97 Communications, the parent company of Paytm, surged another 8.60% in early morning trade, crossing the ₹400 mark for the first time in 8 weeks to reach ₹414.

This rally has propelled the stock to gain 33.54% from its all-time low of ₹310, touched in the second week of May. During Friday's trading session, the company's shares hit the 10% upper circuit limit, following a 2% gain in the previous session.

Stock exchanges recently raised Paytm's upper circuit limit to 10%, after initially reducing it to 5% due to significant volatility stemming from the RBI's restrictions on Paytm Payments Bank.

Paytm has recently said it is seeing early signs of recovery and strong stabilization in its Unified Payments Interface (UPI) business. In May, the total value of UPI transactions processed on the Paytm platform grew to ₹1.24 trillion, driven by several new initiatives such as Credit Card on UPI and UPI Lite. 

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According to ANI, total transactions on the platform stabilized at 1.14 billion in May, reinforcing Paytm's position as the third-largest player in terms of market share since becoming a Third-Party Application Provider (TPAP) in March.

Moreover, due to its extensive merchant base, Paytm continues to lead in peer-to-merchant (P2M) UPI transactions.

In May 2024, UPI achieved a milestone by handling nearly 14 billion transactions, a substantial 49% year-on-year increase, processing transactions worth ₹20.45 trillion—its highest since its launch in 2016, the report said. 

This surge underscores the growing preference for digital payments among Indian consumers and businesses. Paytm has been bullish on UPI and has formed partnerships with various banks and financial institutions, including Axis Bank, HDFC Bank, State Bank of India (SBI), and YES Bank, to enhance its UPI service.

Also Read: Paytm clarifies Vijay Shekhar Sharma is not selling stake to Adani; stock up 5%

Meanwhile, in May, PhonePe and Google Pay, the two key players in the Indian fintech ecosystem, these two companies handled transactions to the tune of ₹7.23 trillion and ₹10.33 trillion, respectively. 

In January, the Reserve Bank of India (RBI) prohibited Paytm Payments Bank Limited (PPBL) from accepting deposits, credit transactions, or top-ups in any customer accounts, wallets, and FASTags, effective March 15, in the interest of customers and merchants.

As a result, investors sold off the company's shares heavily in the subsequent months, leading to a 47% decline in February, a 7.51% drop in April, and an additional 3.13% fall in May.

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For the fourth quarter of the financial year 2023–24, the company's loss widened to ₹550 crore, impacted by the RBI's ban on transactions related to its payments bank. This compares to a loss of ₹167.5 crore in the same period the previous year.

Paytm's revenue from operations declined by 2.8 percent to ₹2,267.1 crore in the reported quarter, down from ₹2,464.6 crore in the corresponding quarter of FY23.

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For the year ended March 31, 2024, the company's loss narrowed to ₹1,422.4 crore, compared to a loss of ₹1,776.5 crore in FY23. Paytm's annual revenue increased by approximately 25 percent to ₹9,978 crore for FY24, up from ₹7,990.3 crore in FY23.

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