Paytm shares surged to hit the upper circuit for the second consecutive session on Monday, following the beleaguered fintech giant’s collaboration with Axis Bank for settling merchant payments.

What Happened: One97 Communications, the parent firm of Paytm, has transitioned its nodal account to Axis Bank via an escrow account it established. The company, overseeing Paytm QR, Soundbox and card machines, assured users that it would continue operations for all its merchant partners.

This move follows the Reserve Bank of India’s (RBI) extension of the deadline for Paytm Payments Bank account holders, both customers and merchants, to transfer their assets and seek alternative banks until March 15.

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The RBI also issued a set of frequently asked questions for all Paytm Payments Bank account holders, clarifying details regarding remaining balances, UPI payments and FASTag usage.

What Brokerages Say: Citi maintains a “sell” rating on Paytm stock with a target price of ₹500 per share. The brokerage noted that the RBI’s FAQs do not directly address bank partnerships with Paytm. Despite the nodal account shift and the deadline extension, business operations for devices tied to non-Paytm Payment Bank accounts remain unaffected, according to Citi.

Jefferies India has temporarily suspended its rating on Paytm until the “news flow settles down” around the fintech giant. The brokerage transitioned from “underperform” to “not rated,” projecting a 28% year-on-year revenue decline for FY25, which could result in cash burns for Paytm.

Price Action: Paytm’s share price shot up 5% to ₹358.35 at the start of trade on Monday to hit the upper circuit of the regulator-defined price band.

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