Paytm shares leaped to a record ₹1,960 on Friday after banking regulators handed the fintech pioneer a long-sought operating milestone.
The Reserve Bank of India granted preliminary authorisation to Paytm's payment services arm to operate a payment system for issuing prepaid payment instruments, including digital wallets. The permit clears parent entity One 97 Communications to re-expand its core consumer payments architecture. Traders pounced immediately.
Buyers cleared out sell orders at the open. Friday's surge extended a furious momentum run that began twenty-four hours earlier, when the stock jumped 7.31% to close Thursday at ₹1,925. That previous session marked the first time the counter crossed the ₹1,900 threshold since its debut in 2021, bringing the stock within ₹25 of its ₹1,950 National Stock Exchange listing price before blowing past it entirely on Friday.
Three years of listing losses vanished in two trading sessions.
The central bank's preliminary nod reinstates Paytm's ability to issue wallets—stored-value instruments enabling users to park cash digitally and settle merchant transactions across networks. While full commercial rollout remains subject to final operational clearances, institutional desks treated the decision as a decisive shift in Paytm's regulatory standing.
| Financial & Regulatory Metric | Level / Detail |
|---|---|
| Intra-Day Record Price | ₹1,960 |
| Thursday Closing Price | ₹1,925 (+7.31%) |
| Original NSE Listing Price (2021) | ₹1,950 |
| RBI Regulatory Status | Preliminary PPI & Wallet Authorisation |
| NPCI Proposed UPI P2M MDR | 40 bps on transactions > ₹2,000 |
| Estimated FY28 UPI MDR Revenue | Up to ₹1,160 crore |
| Bernstein Target Price | ₹2,200 (Outperform) |
| Projected Revenue CAGR (FY26–FY30) | 24% |
Market Context: For institutional funds holding underwater positions since the November 2021 initial public offering, the break above ₹1,950 resets the valuation narrative. The recovery reframes Paytm from a battered regulatory target into a functioning payments gateway with re-opened retail deposit pipelines.
Regulatory permits are only half the ledger. Market participants are positioning aggressively for fee-structure shifts inside India's retail payments architecture.
The National Payments Corporation of India deferred a proposed merchant discount rate framework on Unified Payments Interface rails last month, pushing the decision past Diwali. The pending framework outlines an MDR levy of 40 basis points on person-to-merchant UPI transactions exceeding ₹2,000.
If implemented, the merchant levy opens a massive revenue stream. Equity analysts estimate UPI MDR collections could yield up to ₹1,160 crore in top-line revenue for Paytm in FY28 alone, transforming high-volume merchant routing into direct cash flow.
Institutional conviction had already begun shifting ahead of Friday's regulatory order. Global brokerage Bernstein selected Paytm as its top industry pick in September, assigning an Outperform rating alongside a ₹2,200 target price.
Bernstein's thesis tracks rapid expansion across merchant lending distribution and sharp gains in operational leverage. The brokerage projects Paytm will expand revenues at a 24% compound annual growth rate between FY26 and FY30 as merchant subscriptions and device fees stabilize.
Attention now turns to the Reserve Bank of India's timeline for final operational validation, alongside the National Payments Corporation of India's post-Diwali review of merchant payment charges.