June 10, 2024
New Delhi, India
Paytm Share Price
Shares of One 97 Communications, the parent company of Paytm, experienced a significant surge, rising by 8.60% to ₹414. This rally marked the first time in eight weeks that the stock crossed the ₹400 threshold. The current uptrend has allowed Paytm shares to recover by 33.54% from their all-time low of ₹310, which was recorded in the second week of May.
Recent Performance and Market Reaction
Extending their winning streak for the third consecutive day, Paytm shares reached ₹414 in early morning trade. The stock hit the 10% upper circuit limit during Friday’s trading session, following a 2% gain in the previous session. Stock exchanges had recently increased Paytm’s upper circuit limit to 10%, having initially reduced it to 5% due to significant volatility caused by the Reserve Bank of India’s (RBI) restrictions on Paytm Payments Bank.
Signs of Recovery and Business Stabilization
Paytm has reported early signs of recovery and 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, thanks to new initiatives like Credit Card on UPI and UPI Lite. Total transactions stabilized at 1.14 billion in May, solidifying Paytm’s position as the third-largest player in terms of market share since becoming a Third-Party Application Provider (TPAP) in March.
Market Position and Partnerships
Paytm continues to lead in peer-to-merchant (P2M) UPI transactions, leveraging its extensive merchant base. In May 2024, UPI handled nearly 14 billion transactions, a 49% year-on-year increase, processing transactions worth ₹20.45 trillion. This growth underscores the increasing preference for digital payments in India. Paytm has partnered with several banks, including Axis Bank, HDFC Bank, State Bank of India (SBI), and YES Bank, to enhance its UPI service.
Competitive Landscape
In comparison, PhonePe and Google Pay handled transactions worth ₹7.23 trillion and ₹10.33 trillion, respectively, in May. These companies remain key players in the Indian fintech ecosystem, contributing significantly to the overall UPI transaction volume.
Impact of RBI Restrictions
In January, the RBI prohibited Paytm Payments Bank Limited (PPBL) from accepting deposits, credit transactions, or top-ups in any customer accounts, wallets, and FASTags, effective from March 15. This led to a substantial sell-off of Paytm shares, resulting in a 47% decline in February, a 7.51% drop in April, and an additional 3.13% fall in May.
Financial Performance
For the fourth quarter of the financial year 2023-24, Paytm’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. Revenue from operations declined by 2.8% to ₹2,267.1 crore in the reported quarter, down from ₹2,464.6 crore in the corresponding quarter of FY23.
For the year ending March 31, 2024, Paytm’s loss narrowed to ₹1,422.4 crore, compared to a loss of ₹1,776.5 crore in FY23. The company’s annual revenue increased by approximately 25% to ₹9,978 crore for FY24, up from ₹7,990.3 crore in FY23.
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