At 2:47 pm, the stock rose 11.4% to Rs. was trading at 618. Shares of Paytm also surged 16% in the past two days after the company received approval from the finance ministry to invest in its payment services business.
After this approval, the payment services business, Paytm Payments Services Limited (PPSL), will resubmit an application for its payment aggregator license.
“We would like to inform you that PPSL has received approval from the Government of India, Ministry of Finance, Department of Financial Services vide its letter dated August 27, 2024 for downstream investment from the Company in PPSL. With this approval, PPSL will proceed to resubmit its PA application. In the meantime, PPSL will continue to provide online payment collection services to existing partners,” the company said in a filing to the exchanges on Wednesday.
A 97 Communications, which operates Paytm, is under investigation by India’s banking regulator and the agency that fights financial crimes after the central bank ordered the closure of its payments bank in January.
With the latest approval, the company will resubmit an application with the ministry to re-license its payment services business, Paytm said.
Meanwhile, brokerage firm Ventura Securities also initiated coverage on Paytm with a ‘buy’ rating and Rs. 1,170, compared to the previous day’s Rs. 554 is 111% higher than the closing price.
Despite RBI restrictions on its associate Paytm Payments Bank (PPBL), Ventura Securities believes that Paytm’s business model is strong, and its technology superior.
With a pan-India merchant base of 40.7 million and 78 million monthly transaction users (MTUs), Paytm has a strong foundation for recurring revenue. The growing popularity of UPI as the digital payment method of choice and the widespread use of Paytm’s Soundbox (+POS) further positions the company to capitalize on these trends, Ventura added.
The report forecasts that in FY24-27E, Paytm’s revenue, contribution profit and pre-ESOP EBITDA will grow at CAGRs of 14.1%, 15.6% and 54.5%, respectively, from Rs. 14,531 crore, Rs. 8,301 crore and Rs. 8,301 crore and Rs. 299 will reach. By FY27E. Additionally, in FY24 Rs. 908 crore and Rs. 1,417 crore loss, post-ESOP EBITDA and net earnings by FY27E at Rs. 1,379 crore and Rs. 1,388 crore with an estimate expected to be profitable.
Ventura expects this growth to be driven by a GMV (payment services and devices) of Rs. 32.1 trillion (21.9% CAGR), driven by over 4X growth in loan disbursements and doubling of revenues from marketing services (ticketing, vouchers etc.). Zomato). Stopped services like Paytm Wallet, FASTag, BNPL and house rent payments are expected to resume after RBI deregulation.
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