Paytm’s parent company, One 97 Communications, saw its shares surge by 5.12% today, trading at ₹722.50 on the BSE. This upward movement follows the National Payments Corporation of India (NPCI) granting approval for Paytm to onboard new users for its Unified Payments Interface (UPI) app, lifting the ban previously imposed on the company’s payments bank by the Reserve Bank of India (RBI).
NPCI Lifts Onboarding Restrictions
The NPCI’s decision to lift the ban on onboarding new UPI users for Paytm Payments Bank Ltd (PPBL) marks a significant milestone for Paytm. After a period of restrictions, this approval allows the company to accelerate user growth on its UPI platform. This development comes at a time when Paytm is focusing on expanding its payments ecosystem.
Industry analysts believe that the lifting of restrictions will help Paytm regain its competitive edge in the digital payments space. This positive market sentiment is reflected in the sharp rise in Paytm’s share price today.
Paytm Q2FY25 Results: A Strong Performance
Paytm also posted strong Q2FY25 results, reporting a net profit of ₹930 crore, including a one-time gain of ₹1,345 crore from the sale of its entertainment ticketing business. This marked a significant turnaround for the company, which had previously struggled with profitability.
| Financial Metric | Q2FY24 | Q2FY25 | YoY Growth (%) |
|---|---|---|---|
| Net Profit | ₹36 crore | ₹930 crore | 2483% |
| Revenue from Operations | ₹2,848 crore | ₹4,799 crore | 69% |
Revenue from operations grew by 11% quarter-on-quarter, driven by a 5% QoQ growth in Gross Merchandise Value (GMV) and a 34% QoQ increase in revenue from financial services.
Fundraising for Future Growth
To further strengthen its balance sheet, Paytm’s board has approved a fundraising plan of ₹8,500 crore through a Qualified Institutional Placement (QIP) of equity shares. This move will help the company continue investing in its business expansion and manage losses from its quick commerce operations.
What’s Next for Paytm?
The onboarding approval and strong Q2 results have positioned Paytm for further growth in the UPI and financial services segments. The company’s ability to scale its user base and expand its services will be critical for long-term profitability. Investors should keep an eye on Paytm’s performance in the upcoming quarters, especially as the company continues to grow its UPI business.
Conclusion: Is Paytm a Buy?
With strong financial results and the NPCI’s approval for onboarding new UPI users, Paytm is in a favorable position to capitalize on the growing digital payments market. The ₹8,500 crore QIP will further boost its financial health, making it a stock to watch in the long term.
Disclaimer
This article is for informational purposes only. Please consult a financial advisor for professional investment advice.
