Shares of Paytm parent One 97 Communications surged more than 7% on September 16 after several brokerages raised their target prices and earnings estimates following the introduction of charges on select high-value UPI merchant transactions.
Jefferies raised its target price on Paytm to ₹2,150 from ₹1,600, while also increasing its earnings estimates for the company. The brokerage reportedly raised its FY28-FY29 earnings estimates by around 10–12%, reflecting the potential contribution from UPI monetisation.
JM Financial also raised its Paytm target price to ₹2,150 from ₹1,950, estimating that the new UPI framework could generate incremental revenue of about ₹210 crore in FY27 and ₹470 crore in FY28.
Meanwhile, Emkay Global placed a target price of ₹2,400, the highest among the latest targets reported. The brokerage estimates that UPI merchant discount revenue could reach around ₹1,120 crore in FY28. CLSA moved its stance from Reduce to Hold with a ₹1,600 target, while Bernstein retained its ₹2,200 target.
The changes follow NPCI’s decision to introduce a 0.4% Merchant Discount Rate (MDR) on eligible person-to-merchant UPI transactions above ₹2,000 from October 15. The charge will be capped at ₹300 per transaction, while consumers will continue to make UPI payments without a transaction fee.
The new framework could provide payment companies with a new monetisation channel for transactions that were previously processed without MDR. However, the actual financial impact on Paytm will depend on transaction volumes, merchant participation and how the new system is implemented.