Shares of One 97 Communications Limited, commonly known as Paytm, surged by 5 percent hitting the upper circuit limit for the second consecutive session on Monday. This uptick followed the company's announcement of partnering with Axis Bank to ensure the continuation of merchant settlements, eliciting positive investor sentiment. Additionally, the Reserve Bank of India (RBI) provided clarity through its Frequently Asked Questions (FAQs), reassuring stakeholders about the continuity of Paytm's QR, Card machine, and Soundbox services beyond March 15.

As trading commenced, Paytm shares swiftly reached the upper price band, touching Rs 358.55 on the Bombay Stock Exchange (BSE), resulting in a market capitalization of Rs 22,773.21 crore. This marked the second consecutive session where Paytm's shares hit the upper circuit limits. While Bernstein maintained an outperform rating on the stock with a target of Rs 550, Citi suggested a target of Rs 550 but upheld its sell call, citing optimism about new partnerships despite reservations. The brokerage anticipated Paytm to announce additional bank collaborations in the future.

In a regulatory filing to BSE, Paytm disclosed the rationale behind the Axis Bank partnership, highlighting its intent to replace the existing nodal account used by Paytm Payments Bank. The company emphasized that its subsidiary, Paytm Payment Services Limited, had been utilizing Axis Bank's services since its inception. Paytm further revealed ongoing discussions with other banks to explore a secondary partner for nodal/escrow services, ensuring seamless merchant settlements.

The RBI's FAQs confirmed the continued functionality of Paytm's QR, Card machine, and Soundbox services post-March 15. However, Bernstein expressed a desire for more clarity regarding merchant obligations and Paytm's operational adjustments. While acknowledging potential regulatory constraints under the National Payments Corporation of India (NPCI) and the National Highways Authority of India (NHAI), Bernstein emphasized the importance of comprehensive guidance in consultation with relevant authorities.

As Paytm navigates these developments, stakeholders eagerly await further details to gauge the company's trajectory amidst evolving regulatory frameworks and strategic partnerships.