Paytm Share Price Soars to Over Three-Year High After RBI Approves Online Payment Aggregator License
On August 13, 2025, shares of One97 Communications Ltd., the parent company of Paytm, surged to their highest level since January 2022, climbing nearly 6% to ₹1,187 per share on the NSE. This remarkable rally was triggered by the Reserve Bank of India (RBI) granting in-principle authorization to Paytm’s subsidiary, Paytm Payments Services Ltd. (PPSL), to operate as an online payment aggregator. The approval marks a significant milestone for Paytm, lifting a regulatory cloud that had loomed since November 2022 and reigniting investor optimism. Let’s explore why this news is a game-changer for Paytm and what it means for its future.
The RBI Approval: A Turning Point for Paytm
The RBI’s decision to grant PPSL in-principle approval to function as an online payment aggregator under the Payment and Settlement Systems Act, 2007, is a pivotal moment for Paytm. This license allows PPSL to resume onboarding new merchants, a restriction that had been in place since November 2022 due to non-compliance with foreign direct investment norms. The approval comes with conditions: PPSL must complete a comprehensive system and cybersecurity audit within six months, conducted by a CERT-In empanelled auditor or a qualified professional, and submit the report to the RBI. Failure to comply could result in the authorization lapsing.
The lifting of the merchant onboarding ban is particularly significant. Payment services account for over half of Paytm’s consolidated revenue, and the ability to expand its merchant base is expected to drive transaction volumes and revenue growth. Additionally, the approval follows the resolution of a key regulatory hurdle—Paytm’s clearance of foreign investment issues after Ant Group’s exit from its stake, which had previously complicated compliance with India’s Press Note 3 regulations.
Why the Stock Surged
The market’s enthusiastic response, with Paytm shares jumping 5–6% to a 52-week high, reflects renewed confidence in the company’s growth potential. Here’s why investors are buzzing:
- Regulatory Relief: The RBI’s nod removes a major overhang that had restricted Paytm’s ability to scale its core payments business. The company can now onboard new online merchants, boosting its payment aggregation services.
- Revenue Growth Potential: Resuming merchant onboarding is expected to increase transaction volumes, directly impacting Paytm’s revenue. Analysts, such as those at JM Financial, estimate a 5% boost to Paytm’s FY27 EBITDA due to this development.
- Market Sentiment: Paytm’s stock has already risen 133% over the past 12 months and 15% year-to-date, reflecting a broader recovery narrative. The RBI approval reinforces the perception of Paytm as a turnaround story, especially after its shares hit an all-time low of ₹310 in 2024 following regulatory challenges with its Payments Bank.
- Analyst Optimism: Out of 19 analysts tracking Paytm, 10 maintain a “buy” rating, with targets as high as ₹1,400 (Dolat Capital) and ₹1,320 (JM Financial), signaling strong upside potential. The average 12-month price target of ₹1,145.31 suggests a 2% upside from the current peak.
Paytm’s Journey: From Lows to Highs
Paytm’s stock has been on a rollercoaster. After its IPO in 2021 at ₹2,150, the stock faced significant challenges, including regulatory setbacks and a loss of investor confidence, plummeting to ₹310 in 2024. The RBI’s restrictions on Paytm Payments Bank and the initial rejection of PPSL’s aggregator license in 2022 due to foreign investment issues were major blows. However, strategic moves, such as securing government approval for downstream investment in August 2024 and Ant Group’s exit, paved the way for this regulatory win.
The recent rally to ₹1,187—over three times its all-time low—marks a significant recovery. The stock’s Relative Strength Index (RSI) of 59–65.8 indicates strong momentum, though analysts caution it’s nearing overbought territory. Support levels at ₹1,097–₹1,107 and resistance at ₹1,200–₹1,250 suggest the stock could face volatility but has room for further gains if momentum holds.
What’s Next for Paytm?
The RBI approval is more than just a regulatory green light—it’s a catalyst for Paytm’s growth. Here’s what to watch:
- Merchant Expansion: With the ban lifted, Paytm can aggressively onboard new merchants, strengthening its position in India’s competitive digital payments market.
- Cybersecurity Compliance: The mandated system and cybersecurity audit will be critical. Successful completion within six months will solidify PPSL’s authorization, while failure could jeopardize progress.
- Additional Regulatory Triggers: Analysts point to potential future catalysts, such as UPI monetization and Paytm wallet approvals, which could further boost EBITDA by 25–30%.
- Market Dynamics: Paytm operates in a fast-evolving fintech landscape. Its ability to leverage technology, such as AI-driven payment solutions, and maintain robust financials (despite a high P/E ratio of 236.2 and negative ROE/ROCE) will be key to sustaining investor confidence.
Takeaways for Investors
For investors, Paytm’s rally is a moment of opportunity tempered by caution. The stock’s 133% growth over the past year and strong analyst backing make it attractive, but its lofty valuation and regulatory conditions warrant careful consideration. Short-term traders may capitalize on the momentum, while long-term investors should monitor Paytm’s ability to translate this regulatory win into sustained revenue growth and profitability. As JM Financial notes, the approval is a “big sentimental trigger,” potentially paving the way for further regulatory clearances.
Conclusion
Paytm’s share price hitting a three-year high of ₹1,187 on August 13, 2025, underscores the market’s excitement over the RBI’s in-principle approval for PPSL to operate as an online payment aggregator. This milestone lifts a long-standing regulatory restriction, enabling Paytm to scale its core business and reinforcing its turnaround narrative. While challenges like cybersecurity compliance and valuation concerns remain, the approval marks a new chapter for Paytm, positioning it for growth in India’s dynamic fintech sector. As the company navigates this pivotal moment, investors and analysts alike will be watching closely to see if Paytm can sustain its upward trajectory.
Sources: NDTV Profit, LiveMint, Economic Times, India Today, CNBC TV18, Stocktwits
