Paytm Share Price: Stock Hits 52-Week High On Strong Q1 Profit, UPI MDR Hopes

One 97 Communications, the parent company of Paytm, saw a strong rally in trade on Tuesday, August 25, with the stock climbing as much as 5.6% to touch a fresh 52-week high of Rs 1,714.90 on the NSE. The move extends what has already been a sharp run for the stock, which has gained 8% over the past five sessions, more than 31% in the past month, and over 49% across the last six months.

The latest move comes after a series of developments that have improved the outlook for the fintech company, including a strong June quarter, expectations of higher revenue growth and the possibility of a new monetisation opportunity in UPI payments.

Paytm reported a 79% year-on-year increase in consolidated net profit to ₹220 crore for the first quarter of FY27, while revenue from operations rose 27.6%. The company has also indicated that it expects revenue growth in FY27 to exceed the 22% growth recorded in FY26.

Another potential positive for Paytm is the government's consideration of a framework that could bring back the Merchant Discount Rate (MDR) on certain UPI transactions. The proposal is expected to cover only higher-value transactions involving large merchants, while UPI payments would remain free for consumers and most merchants.

Under the proposal being discussed, an MDR of around 0.3-0.5% could be levied on UPI transactions above ₹2,000 made at large merchants. Such transactions account for only about 4% of UPI transaction volumes but represent nearly 67% of the total value processed.

Industry estimates suggest that the proposed framework could create a ₹5,000-10,000 crore revenue opportunity for the payments industry. For Paytm, which remains one of India's largest digital payment platforms, any revival of MDR could provide an additional source of revenue.

MDR, or Merchant Discount Rate, is the fee paid by a merchant when a digital payment is processed. The charge is generally distributed among the payment platform, banks and other entities involved in completing the transaction.

Investor interest in Paytm has also been supported by institutional activity. Last week, a group of foreign and domestic institutional investors acquired a 3% stake in One97 Communications for ₹2,949 crore through open-market transactions.

Foreign investors participating in the block deal included Goldman Sachs, BNP Paribas, Societe Generale, Ghisallo Capital Management, Oxbow Capital Management, North Rock Capital Management, Viridian Asset Management, Vittoria Fund-OC and Integrated Core Strategies (Asia).

The investors collectively bought 1.92 crore shares, equivalent to a 3% stake in the company, according to NSE block deal data. Several domestic mutual funds, including SBI Mutual Fund, Aditya Birla Sun Life Mutual Fund, HDFC Mutual Fund, Kotak Mahindra Mutual Fund, HSBC Mutual Fund, Sundaram Mutual Fund and Tata Mutual Fund, also participated.

ICICI Prudential Life Insurance and Tata AIA Life Insurance were among the insurers that bought shares in the transaction.

Meanwhile, Paytm founder Vijay Shekhar Sharma could see a revision in his remuneration after an independent benchmarking exercise found his existing compensation to be materially below comparable roles.

Sharma's base remuneration has remained unchanged since August 19, 2022, following his reappointment as managing director and chief executive officer. The company said he had

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