Once battered after its IPO, One 97 Communications, the parent company of Paytm, has staged a dramatic turnaround, consistently delivering strong monthly performances that have brought relief to early investors and doubled the money for those who entered the stock in the second half of last year.
The company’s improved financial performance, driven by a sharper focus on its core business, cost-cutting measures, and the closure of non-core segments such as ticketing, has been well received by the Street. Regulatory advancements have also removed key overhangs that had previously weighed on the stock.
These positive developments have also prompted analysts to raise their outlook, marking Paytm’s biggest rebound since its listing in November 2021. After plunging to an all-time low of ₹310 apiece in May 2024, the stock staged a strong recovery in the subsequent months and has managed to sustain that momentum to date, gaining 271%.
Over the last 14 months, Paytm shares have ended 12 months in the green, including a nearly 18% jump in July, despite broader market weakness. In the previous session, the stock also touched its highest level since January 2022.
Amid its sharp focus on its core business has led Paytm to report operating profit earlier than projected as in the June quarter, it reported its first-ever operationally driven quarterly net profit since listing, at ₹123 crore, on revenue of ₹1,917 crore.
The performance was driven by an increase in the number of subscription merchants, higher GMV, and growth in revenues from the distribution of financial services.
Green signal from RBI
The Reserve Bank of India (RBI) has granted in-principle approval to Paytm Payments Services Ltd. (PPSL), a wholly-owned subsidiary of Paytm, to operate as an online payment aggregator under the Payment and Settlement Systems Act, 2007.
The approval marks a significant regulatory milestone for the company and lifts the ban on onboarding new merchants, which had been in place since November 2022, when PPSL’s earlier application was rejected.
Domestic brokerage firm JM Financial expects this to have a 5% benefit to Paytm’s FY27E EBITDA and noted that it could also be a major sentimental trigger, as the approval is likely a precursor to further regulatory clearances for Paytm.
Importantly, the approval comes soon after Ant Financial’s complete exit from Paytm in a clean-out trade, with the sale of its residual 5.84% stake, effectively removing Chinese shareholding from the company’s ownership structure.
Since the RBI disruption in January 2024, parts of the investor community have been apprehensive about investing in Paytm, anticipating further regulatory turbulence. With this approval, it becomes a clear signal that the RBI is likely satisfied with the actions taken by Paytm in terms of compliance as well as changes in shareholding, the brokerage said.
Mutual Fund holdings in Paytm hit record high
Mutual funds significantly increased their stake in the company during the first quarter of the current fiscal year (Q1FY26), pushing holdings to an all-time high.
As of June 2025, 33 mutual funds collectively held a 13.86% stake in Paytm, equivalent to 8.84 crore shares. This marks a notable rise from the 13.11% stake held at the end of the preceding March quarter, according to Trendlyne’s shareholding data.
Some of the key mutual funds that raised their stakes in the new-age stock include Motilal Oswal Mutual Fund, which now holds a 2.61% stake in the company. Bandhan Mutual Fund entered the stock by acquiring a 1.02% stake, while Nippon Mutual Fund holds a 2.55% stake and Mirae Asset Mutual Fund has a 3.20% ownership.
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