Paytm stock extends gains, soars 14% in two sessions; Nuvama sees fintech firm entering F&O segment

Shares of Paytm parent One 97 Communications extended previous session’s gains, rising over 4 percent on June 10. The stock has rallied 14 percent in the last two sessions as investors showed interest after a revision in the circuit filter.

Recently, NSE revised the circuit filter of Paytm to 10 percent from 5 percent earlier.

Paytm is among a dozen of stocks that could enter the futures and options (F&O) segment if the proposed revision in eligibility criteria for F&O stock selection is applied, Nuvama Institutional Equities said in a note.

Notably, the market regulator SEBI has come out with a consultation paper to seek comments and inputs from all stakeholders on updating eligibility criteria of stock derivatives in line with the market growth.

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Derivatives contracts on stocks can be traded on recognised stock exchanges only if the underlying stocks satisfy certain objective criteria. Such criteria were last reviewed in 2018.

“Considering the implications of the said matter on market participants, public comments are invited on the proposal. Comments may be sent to SEBI, latest by June 19, 2024. Post which they will review and should communicate the possible changes in few weeks,” Nuvama said.

Paytm is seen in the probable list of stocks that could enter the F&O segment if they meet the proposed criteria, though the final discretion is with Sebi, Nuvama said.

At 10:32 am, Paytm shares were trading 3.6 percent higher at Rs 395.35 apiece on the National Stock Exchange (NSE). So far this year, the stock has plunged around 39 percent, underperforming benchmark Nifty 50, which has risen 7.6 percent during this period. In the last one year, Paytm shares have slipped 51 percent.

Paytm recently said it is seeing early signs of recovery and strong stabilisation for its Unified Payments Interface (UPI) business.

The total value of UPI transactions processed on the Paytm grew to Rs 1.24 lakh crore in May, on the back of the company launching several initiatives for users such as credit card on UPI, as well as pushing the lever on UPI Lite. This is higher than Rs 1.22 crore reported in April.

With total transactions on the platform stabilising at 114 crore in May, Paytm, which became a Third-Party Application Provider (TPAP) in March, continues to be the third largest player in terms of market share.

Also Read | Paytm stock zooms 10% after circuit filter revised upwards

Paytm has been positive on UPI and has formed partnerships with various banks and financial institutions including Axis Bank, HDFC Bank, State Bank of India (SBI), and YES Bank to enhance its UPI service.

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