Paytm stock gains for 4th consecutive day: Is the worst over?

Paytm share price: This comes after the National Payments Corporation of India (NPCI) granted approval for Paytm to operate within Unified Payments Interface.

Paytm share price: Shares of One97 Communications, Paytm's parent company , extended gains for the fourth consecutive session as the stock soared over 4% intra-day basis today (March 20) hitting day high of ₹425.70 on the NSE. This comes after the National Payments Corporation of India (NPCI) granted approval for Paytm to operate within the Unified Payments Interface (UPI) framework as a third-party application provider (TPAP) under the multi-bank model.

Paytm share price: A QR code for the Paytm digital payment system at a store in Mumbai, India. (Bloomberg)

Analysts on Paytm stock

Global brokerage firm Morgan Stanley reaffirmed its ‘Equal-Weight’ rating on the stock and maintained a price target of ₹555 per share while domestic broking firm YES Securities upgraded its outlook on Paytm for the first time since initiating coverage. Yes Securities upgraded payments company stock to “buy” from “neutral” and raised the target price to ₹505 from ₹350 saying that NPCI’s approval for Paytm to participate in UPI as a TPAP within the multi-bank model will help sustain its UPI business operations.

What NPCI said in its approval to Paytm

Following NPCI's approval, four major banks, including Axis Bank, HDFC Bank, State Bank of India, and YES Bank, will serve as Payment Service Providers (PSPs) to Paytm.

The banks will help electronic transactions between various parties using the Paytm app for payments and the move comes after the Reserve Bank of India (RBI) directed Paytm to close its Paytm Payments Bank (PPBL) due to compliance concerns.