Motilal Oswal Mutual Fund Raises Stake in Paytm to 5.15%

Motilal Oswal Mutual Fund has increased its stake in One97 Communications Ltd, the parent company of Paytm, to 5.15%, according to recent regulatory filings. This move comes at a time when the fintech major is working to regain investor confidence after months of regulatory scrutiny and business restructuring.

The asset management firm, which previously held a smaller position in the company, acquired additional shares in Paytm through its various schemes. With this purchase, Motilal Oswal joins a growing list of institutional investors who continue to bet on Paytm’s long-term potential despite near-term challenges.

Paytm’s Market Struggles and Recovery Path

Paytm, once hailed as India’s poster child for digital payments, has been facing headwinds since its 2021 IPO, which saw a steep fall in its stock value shortly after listing. Over the past two years, the company has dealt with regulatory hurdles, especially around its payments bank business.

However, the fintech giant has been actively working on strengthening its financial services arm, reducing cash burn, and expanding revenue streams through merchant payments, lending, and wealth management products. Analysts believe that the company’s ongoing restructuring efforts could stabilise its growth trajectory.

Institutional Confidence Building

The increase in stake by Motilal Oswal Mutual Fund signals renewed institutional confidence in Paytm’s business model. Institutional investors often look for long-term fundamentals, and such a move is being seen as a positive development for retail investors as well.

According to market watchers, the timing of this acquisition is crucial. Paytm’s stock has shown signs of recovery in recent weeks after trading at lower levels for much of the year. Analysts suggest that the increased institutional interest could support improved liquidity and investor sentiment around the stock.

Paytm’s Focus Ahead

Paytm has been doubling down on its merchant payments network, which remains one of the largest in India. The company has also expanded into lending partnerships with banks and NBFCs, aiming to reduce reliance on payments revenue alone.

Vijay Shekhar Sharma, founder and CEO of Paytm, has reiterated on multiple occasions that the company’s path to profitability lies in scaling its lending and financial services operations while maintaining leadership in the digital payments space.

Market Outlook

Industry experts highlight that while regulatory risks persist, the long-term opportunity for digital payments and financial services in India remains significant. With government support for digital adoption and growing fintech penetration in Tier 2 and Tier 3 cities, Paytm stands to benefit if it can navigate the regulatory environment effectively.

The latest stake increase by Motilal Oswal Mutual Fund reflects a measured but optimistic bet on Paytm’s turnaround. It will be closely watched by both domestic and foreign institutional investors who remain cautious yet interested in India’s fintech story.