Paytm shares rose approximately five% on Monday after Bernstein analysts raised the company's target price above its initial public offering level [1, 4].
This shift marks the first time Bernstein has assigned a target price that exceeds the company's original IPO valuation. The move suggests a growing analyst confidence in the long-term revenue potential of the Indian fintech giant.
Bernstein set the new target price at Rs 2,200 [1], which is higher than the original IPO price of Rs 2,150 [2]. This new valuation implies a potential upside of 52% [3]. Along with the price increase, the firm retained its "Outperform" rating for One97 Communications Ltd [1].
The analysts based this adjustment on expected revenue from the Unified Payments Interface (UPI) merchant discount rate (MDR) beginning in FY28 [1, 5]. This specific revenue stream is a key factor in the firm's updated valuation model.
Market data from Monday morning showed the stock trading at Rs 1,501 as of 10:02 a.m. IST [6]. While some reports indicated the jump was about five% [4], other data showed the shares were 4.12% higher [7].
The surge in Paytm shares occurred despite a broader market dip. On the same day, the Nifty index fell by 0.09% [8].
“Bernstein raised its target price to Rs 2,200, the first time the target is above the Rs 2,150 IPO price.”
The revision of the target price above the IPO level indicates a pivot in analyst sentiment regarding Paytm's ability to monetize its payment ecosystem. By anchoring the valuation to FY28 UPI revenue, Bernstein is signaling that the company's recovery and growth are tied to regulatory shifts in merchant fees rather than immediate short-term gains.
