NEW DELHI: Paytm‘s payment services arm on Friday received preliminary authorisation from the Reserve Bank of India (RBI) to operate a payment system for issuing prepaid payment instruments, including wallets, sending shares of parent company One 97 Communications to a record high of Rs 1,960.The approval marks a significant development for Paytm’s payments business, allowing it to expand its offerings in the digital payments segment. Prepaid payment instruments allow users to store money digitally and use it for transactions.The latest rally follows a strong run in the stock. On Thursday, Paytm shares surged 7.31 per cent to close at Rs 1,925, crossing the Rs 1,900 mark for the first time since its 2021 listing. The stock had come within Rs 25 of its listing price of Rs 1,950 on the National Stock Exchange.Paytm shares have also gained from expectations of a new merchant discount rate (MDR) framework for Unified Payments Interface (UPI) transactions. The National Payments Corporation of India (NPCI) last month deferred the proposed levy until after Diwali.The proposed framework involves an MDR of 40 basis points on person-to-merchant UPI transactions above Rs 2,000. Paytm is seen as a potential beneficiary, with analysts estimating that UPI MDR revenue could reach up to Rs 1,160 crore for the company in FY28.In September, global brokerage Bernstein named Paytm its top pick, citing growth in merchant lending and improving operating leverage. It retained an Outperform rating and a target price of Rs 2,200, projecting revenue to grow at a compound annual growth rate of 24% between FY26 and FY30.
