Motilal Oswal Mutual Fund Increases Stake in Paytm

why motilal oswal is buying more paytm shares?

Table Of Contents

Motilal Oswal’s Investment and Market Reaction
Why Paytm Is Getting Attention Now
Final Words

Motilal Oswal Mutual Fund has raised its stake in One 97 Communications Ltd, the parent company of fintech major Paytm, by acquiring an additional 26.31 lakh shares. These were purchased through more than 20 of its schemes, including Motilal Oswal Nifty Midcap Fund, Focused Fund, ELSS Tax Saver Fund, and Nifty 500 Index Fund, in open market transactions on August 11, 2025.

With this move, Motilal Oswal Mutual Fund’s stake in Paytm has gone up by 0.41% to 5.15%, making its total holding 3,29,11,399 shares.

We’ll break down everything about this development, the details of the purchase, why Paytm’s stock has been in focus, the company’s strong quarterly numbers, and the recent RBI approval that could change the game.

Motilal Oswal’s Investment and Market Reaction

The purchase was spread across several of Motilal Oswal’s popular schemes, such as:

Following this acquisition, Paytm’s shares reacted positively. On August 20, 2025, the stock rose by over 1.5% to hit a fresh 52-week high of ₹1,254.

Why Paytm Is Getting Attention Now

Two major factors have put Paytm back into the spotlight:

1. Strong Q1 FY26 Results

Paytm reported a sharp turnaround in the quarter ended June 2025 (Q1 FY26):

Net Profit: ₹122.5 crore, compared to a net loss of ₹839 crore in the same quarter last year.
Operating Revenue: ₹1,917 crore, up 28% YoY from ₹1,502 crore.
Sequential Growth: Flat at 0.3% QoQ, as revenue in Q4 FY25 was ₹1,911 crore.

This marked the first major profitable quarter for the fintech, primarily driven by growth in its merchant business.

Supporting this, Paytm’s operational data showed strong growth (Q1 FY26 vs last year):

Subscription merchants (including devices): 1.30 crore (+20% YoY, +5% QoQ)
Merchant transactions: 1,303 crore (+33% YoY, +10% QoQ)
Total transactions on platform: 1,464 crore (+33% YoY, +11% QoQ)

Clearly, Paytm is deepening its merchant connections and scaling up processing revenues.

2. RBI’s “In-Principle” Approval as a Payment Aggregator

On August 12, 2025, Paytm received “in-principle” authorisation from the Reserve Bank of India (RBI) to operate as an online payment aggregator.

Why this matters:

Biggest Roadblock Gone: Until now, Paytm was limited to onboarding only existing merchants. With the approval, it can freely onboard new merchants.
Revenue Strengthening: Payments contribute more than half of Paytm’s total revenue. This approval directly strengthens its largest business segment.
Investor Confidence: The stock price jumped nearly 5% after the approval news, signalling renewed market confidence.
Still a Process: This is only an in-principle approval. Paytm will need to pass system and security checks within 6 months to get the final license.

For a more detailed analysis, you can refer to this blog.

Final Words

Motilal Oswal Mutual Fund’s increased stake in Paytm shows growing institutional confidence in the fintech. Backed by a strong Q1 turnaround, rising transaction volumes, and RBI’s approval to operate as a payment aggregator, Paytm seems to have cleared its biggest hurdles.

While challenges remain, especially the final aggregator licence, momentum is clearly on Paytm’s side. For investors, the combination of profitability, regulatory clarity, and renewed institutional backing makes Paytm one of the most closely watched fintech stories in India today.

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