Paytm shares at ₹1,925, close in on IPO listing-day high after 100% rally from March lows. What drove the recovery?
A Ksheerasagar
For long-term Paytm shareholders, Thursday's rally marked a significant milestone, with the stock moving closer to its listing-day high nearly five years after its IPO. The shares ended today's session 7.3% higher at ₹1,925, their highest closing level since making their stock market debut in November 2021.
The rally came amid improving investor sentiment, driven by expectations that the introduction of merchant discount rate (MDR) charges could boost margins and provide a fresh growth driver for the company.
Analysts believe the introduction of MDR could be a structural positive for the digital payments industry, particularly for companies with significant UPI merchant-acquiring businesses.
According to the National Payments Corporation of India (NPCI), MDR charges would be implemented immediately after Diwali, with the revised effective date to be notified separately. With the festive period now over, merchants and payment companies are awaiting further clarity on the rollout.
Although the stock has moved closer to its listing-day levels, the milestone comes after a sustained rally that began in April. Paytm shares closed higher in five of the seven months since then, with a 28% return in August marking their biggest-ever monthly gain and has rebounded 100% from March lows.
Following the Reserve Bank of India's restrictions on Paytm Payments Bank in 2024, the company shifted its focus towards its core payments and financial services distribution businesses. It has also been driving growth by onboarding higher-quality merchants and expanding fee-based, scalable revenue streams.
These strategies were reflected in the company's September-quarter financial performance. Paytm reported a net profit (PAT) of ₹226 crore, marking a more than tenfold increase, or 976% growth year-on-year (YoY), compared with ₹21 crore in the corresponding quarter last year.
Revenue from operations stood at ₹2,648 crore, registering a 28.5% YoY increase from ₹2,061 crore in Q2 FY26.
Mutual funds have further increased their exposure to the company during the second quarter of the current fiscal year (Q2 FY27), taking their collective shareholding to an all-time high.
At the end of the September quarter, 43 mutual funds collectively held a 21.17% stake in Paytm, equivalent to approximately 13.5 crore shares. This marked a notable increase from the 17.94% stake held at the end of the previous quarter in June, according to Trendlyne's shareholding data.
Domestic funds have been gradually accumulating shares in Paytm, with the most substantial increase occurring in the recently concluded quarter. Foreign institutional investors (FIIs) remained the largest shareholders in the company, with a 43.5% stake, while retail investors held around 27% at the end of Q2 FY27.
The journey of One 97 Communications, Paytm's parent company, since its ₹18,300-crore IPO has been marked by sharp twists and turns following the fintech major's listing in November 2021. Paytm shares debuted on the stock exchanges at ₹1,950, a 9.3% discount to the IPO price of ₹2,150 apiece.
The weak listing was followed by a prolonged correction, with regulatory challenges in 2024 adding further pressure on the stock. Paytm shares eventually plunged to around ₹310, dashing the hopes of shareholders who had expected stronger returns from the fintech major.
Nevertheless, the stock has staged a remarkable recovery from those lows. Despite periods of market volatility, Paytm shares rebounded sharply, gaining around 220% from their 2024 lows and ending that year with gains of approximately 60%.
The winning momentum extended into the following year, with the stock delivering another 28% return. In the current year, shares have already gained around 48%, putting them on track for their best annual performance since listing and a fourth consecutive year of positive returns.
A Ksheerasagar
Ksheera Sagar has been working as a Market Research Analyst at LiveMint for the past four years, covering stocks, commodities, and broader financial markets. In this role, he closely tracks daily market movements, corporate earnings, sector trends, and macroeconomic developments. <br><br> He has over a decade of experience in the financial services industry and has previously worked with multiple organisations, including global investment bank J.P. Morgan, bringing strong research experience into the newsroom. <br><br> During his career, he has gained extensive exposure to equity research, market analysis, and financial data interpretation, strengthening his expertise across asset classes and market cycles. <br><br> He is known for his data-driven analysis and crisp, listicle-style market stories that break down complex financial developments across key markets for a wide audience. His strong research skills enable him to write detailed and insightful stories on stocks and sectors, focusing on the underlying factors driving market movements. <br><br> His work combines quantitative insights with clear storytelling, presenting financial developments in a clear and structured manner. Moreover, he enjoys writing multibagger and listicle-style copies. Outside of work, Ksheera enjoys playing the piano and exploring new places. He has a keen interest in travel, music, and continuously learning about global markets and economic trends.
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HomeMarketsStock MarketsPaytm shares at ₹1,925, close in on IPO listing-day high after 100% rally from March lows. What drove the recovery?
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