Shares of Paytm's parent company, One99 Communications, have surged 5% in Friday's tarde, hitting the upper circuit. The rise in stock prices follows the National Payments Corporation of India's approval for Paytm to continue as a third-party UPI app.
Third party UPI app
Paytm is now tying up with four prominent banks to facilitate UPI transactions on its platform. These banks are SBI, Axis Bank, HDFC Bank, and YES Bank. In fact, Yes Bank and Axis Bank are already live on Paytm's platform. This means that a customer can continue to make UPI ayments using the Paytm app.
Paytm Payments Bank's closure
The NPCI approval arrives just ahead of the Reserve Bank's deadline, set for March 15, which leads to the shutting down of Paytm Payments Bank (PPBL). The decision however ensures uninterrupted payment operations for Paytm users, in the form of a third party payments app.
This nod has sparked optimism among investors, propelling Paytm's shares to ₹370.90 on the BSE and ₹370.70 on the NSE.
Morgan Stanley's Thumbs Up
Meanwhile, brokerage house Morgan Stanley has issued an 'equal-weight' call on Paytm's shares. It has set a target price of ₹555, indicating of a 57% potential upside from the current valuation.
Analysts at Morgan Stanley view the NPCI nod positively, aligning with their expectations. They anticipate further updates on the impact of these developments on Paytm's businesses, particularly concerning the transition of PPBL's operations to alternative banking partners, as per Money Control