Why Paytm Shares Hit New 52-Week High After New UPI MDR Rules? Jefferies, Goldman Sachs, Emkay Recommend BUY

One97 Communications aka Paytm share price are trading higher on BSE and NSE during September 16th session. The reason is the new UPI rules which will come into effect from October 15, 2026. The government has imposed new merchant discount rate (MDR) on several UPI transaction limit, which is believed to be beneficial for payments applications like Paytm. Accordingly, brokerages like Jefferies, Goldman Sachs and Emkay have recommended BUY on Paytm stock.

New UPI Rules

The NCPI is introducing a 0.4% fee on Person-to-Merchant (P2M) UPI transactions above Rs 2,000. While a MDR of Rs 300 will be imposed on transaction above Rs 75,000.

As per NCPI, UPI processes billions of transactions every month. The MDR is distributed only amongst the UPI ecosystem, to further invest into infrastructure resiliency, innovation, cybersecurity (protecting the UPI Infrastructure with banks and non-banks) and customer service. UPI is a home-grown payment system, and its charges (MDR) are much lower than other payment instruments such as Credit Cards, Debit Cards, Wallets etc. The charges are kept very reasonable and will be applicable only for transactions above Rs 2,000 to ensure UPI remains the most affordable mode of accepting payments.

Paytm Share Price

On Wednesday, at the time of writing, Paytm stock traded higher by 1.40% to Rs 1755.25 apiece on BSE, with a market cap of Rs 1,12,618.21 crore. In the early trade, Paytm had touched a new 52-week high of Rs 1,856.50 apiece on BSE.

The new UPI rules are beneficial for Paytm. As per Emkay Global report, this will make the payment business structurally self-sustaining, making the business model much more resilient.

"We recently revised Paytm's earnings by 20-25% to factor 25bps, but we now further raise earnings for FY28-29 by 10-12% to factor a 40bps revenue pool even after making adjustments for exemptions, competitive pricing and other aspects. We also raise FY27 profit by 18% factoring slight benefit in FY27 as well," said analysts at Jefferies in a note.

BUY Paytm Stock?

Jefferies raised its target price on Paytm to Rs 2,150, while maintaining a BUY recommendation.

Meanwhile, analysts at Emkay said, "Adding the discounted value of this stream to our DCF-based valuations, Paytm's target Mcap increases to Rs1,536 billion (target EV: Rs1,401 bullion), increasing our TP by 41.2% to Rs2,400 (from Rs1,700) and implying 38.2% upside."

Furthermore, Goldman Sachs believes that the UPI MDR is set at 40 basis points on P2M UPI, which surpasses investor expectations of 20 bps to 30 bps, alongside 2 bps MDR on capital market transactions and slab-based MDR on utilities.

Goldman's note said, there is no merchant turnover slab while small merchants under Rs 1 lakh monthly are exempt, and sensitivity analysis points to about Rs 14 billion in incremental EBITDA for Paytm in FY27, though competitive pressure could lower actual earnings translation.

Accordingly, Goldman has maintained BUY rating with a target price of Rs 1,500, highlighting 40% to 70% potential upside to FY28 EBITDA estimates driven by UPI MDR. However, the target price is lower than the current market price of Paytm.

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