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India's leading digital ecosystem for consumers and merchants, <keyword id="6357120" type="General" weightage="20" keywordseo="paytm" source="Orion">Paytm</keyword> announced its second quarter earnings report. The digital payments and financial services platform saw its revenue from operations grow by 64 per cent Y-o-Y to Rs 10.9 billion in Q2 FY 2022, driven by 52 per cent growth in non-UPI payment volumes (GMV) and more than 3 times growth in financial services and other revenue.<br /><br />The company's contribution profit grew to Rs 2.6 billion in Q2 FY 2022, year-on-year increase of 592 per cent. The contribution margin jumped to 24.0 per cent of revenue from 5.7 per cent the previous year.<br /><br />Paytm posted an improved Adjusted EBITDA margin to (39 per cent) of revenues in Q2 FY 2022 (Rs 4,255 million), from (64 per cent) of revenues Q2 FY 2021 (Rs 4,267 million), along with increased investments in technology and merchant base expansion.<br /><br />"The growth of non-UPI GMV has driven continued payments revenue growth, and our UPI-led payment volume growth is translating to a significant ramp up of our financial services offering. We are driving digital payments and financial services penetration and widespread adoption across India. Paytm has seen a strong second quarter of FY22, which is a testimony to the strong two-sided ecosystem of consumers and merchants that we have built. We have maintained the growth momentum in our payments services business, expanded our financial services business aggressively and are on our way to pre-Covid volumes for Commerce and Cloud services," said the company's management on the second quarter earnings.<br /><br />Paytm's Gross Merchandise Value (GMV) growth was driven by active user engagement &amp; adoption across businesses. The company's GMV for Q2FY2022 was Rs 1,956 billion, up by 107 per cent Y-o-Y and the growth momentum continued in October 2021, where the GMV at Rs 832 billion was up 131 per cent Y-o-Y.<br /><br />The company's average Monthly Transacting Users (MTU) in Q2FY2022 is up by 33 per cent Y-o-Y to 57.4 million and the trajectory has continued in October 2021 with 63 million MTUs, growth of 35 per ent Y-o-Y compared to 47 million MTUs in October 2020. The Monthly GMV per Transacting User for Q2 FY 2022 grew 55 per cent Y-o-Y to Rs 11,369.<br /><br />Paytm, which has been focussed on growing its financial services platform, saw its revenue from payments and financial services grew 69 per cent Y-o-Y to Rs 8,426 million while Commerce and Cloud Services revenue grew by 47 per cent Y-o-Y to 2,438 million.<br /><br />The company's lending sector saw a huge boost as the number of loans disbursed grew 714 per cent year-on-year to over 2.8 million in Q2 FY 2022. The lending business continued to show strong growth as a result of the rapid scale-up of all of the company's lending products, including Postpaid (Buy-Now-Pay-Later), consumer loans and merchant loans. The company's financial institution partners disbursed around 1.3 million loans in October 2021, a 472 per cent increase in numbers of loans disbursed Y-o-Y and aggregating to a total disbursal of Rs 6,270 million implying a 418 per cent increase in value of loans disbursed Y-o-Y.<br /><br />Paytm's merchant base grew to 23 million in Q2 FY 2022, up from 18.5 million in Q2 FY 2021. The devices deployed base grew to 1.3 million in Q2 FY 2022 from 0.3 million as of Q2 FY 2021. We continue to witness strong adoption of our devices amongst merchant partners as our deployed base further increased to approximately 1.4 million as of October 2021, the company said.<br /><strong><br />SEE ALSO<br /><br /></strong><a href="https://www.businessinsider.in/international/news/the-us-is-set-to-restrict-travel-from-8-countries-on-monday-because-of-the-new-omicron-coronavirus-variant-of-concern/articleshow/87939147.cms" data-type="tilCustomLink">The US is set to restrict travel from 8 countries on Monday because of the new Omicron coronavirus 'variant of concern'</a><br /><br /><a href="https://www.businessinsider.in/science/news/the-new-coronavirus-variant-omicron-raises-red-flags-among-scientists-but-there-are-more-mysteries-than-answers-about-its-public-threat/articleshow/87940366.cms" data-type="tilCustomLink">The new coronavirus variant, Omicron, raises red flags among scientists — but there are more mysteries than answers about its public threat</a><br /><br /><a href="https://www.businessinsider.in/thelife/news/qatar-airways-says-it-is-not-accepting-passengers-on-its-flights-from-2-african-nations-immediately-due-to-the-new-omicron-variant/articleshow/87940683.cms" data-type="tilCustomLink">Qatar Airways says it is not accepting passengers on its flights from 2 African nations immediately due to the new Omicron variant</a>

Paytm  Q2 result — Operational revenue crosses ₹1000 crore, loss widens by ₹37 crore

<br /><ul><li><strong><keyword id="6357120" type="DEFINITION" weightage="20" keywordseo="paytm">Paytm</keyword> experienced consecutive losses, from nearly ₹9 billion for FY 2016-17 to ₹16 billion for the FY 2017-18.<br /></strong></li></ul><ul><li><strong>Despite the widening loss, Paytm has counted on investments from Berkshire Hathaway, <keyword id="302749" type="COMPANY" weightage="20" keywordseo="Alibaba">Alibaba</keyword> Group and <keyword id="2572690" type="COMPANY" weightage="20" keywordseo="SoftBank-Group">SoftBank Group</keyword> to keep expanding its operations. <br /></strong></li></ul><ul><li><strong>The company’s expenses shot up due to a surge in personnel costs as well as advertising and promotional expenses. <br /></strong></li></ul><ul><li><strong>After the debut in Japan with the launch of <keyword id="2444167" type="PERSON" weightage="20" keywordseo="PayPay">PayPay</keyword>, Paytm is all set to expand into European markets. </strong><br /></li></ul>Paytm’s parent, One97 Communications has<a href="https://www.bloombergquint.com/business/losses-widen-for-paytms-parent#gs.Dp5tQ0o"> recorded a loss of ₹16 Billion</a> for the FY18, which is 2.5 times the revenue recorded for the year. The total revenue climbed to <a href="https://www.livemint.com/Companies/eBavMpOhT3mwIMYlxbtUiI/Paytm-losses-swell-69-to-Rs1490-crore-in-FY18.html">₹3.3 billion, from ₹7.8 billion i</a>n FY17. The company has been trying to cut down on losses since the time it carved out its e-commerce arm from the parent company with a <a href="https://entrackr.com/2018/01/paytm-brings-losses-40/">transfer of assets</a> accounting to ₹6.2 billion at the time of hive-off.<br /><br />However, despite the widening loss, Paytm has remarkably retained its list of investors. The company has counted on investments from Berkshire Hathaway after Alibaba Group and SoftBank Group Corporation that are the <a href="https://www.bloombergquint.com/business/losses-widen-for-paytms-parent#gs.Dp5tQ0o">largest stakeholders</a> for the company with 40% and 20% stake, respectively. Founder, <keyword id="198636" type="PERSON" weightage="20" keywordseo="Vijay-Shekhar-Sharma">Vijay Shekhar Sharma</keyword>, holds a share of 16%.<br /><br />Though the reason for losses are still unanswered, the company’s expenses shot up due to a surge in <a href="https://www.livemint.com/Companies/eBavMpOhT3mwIMYlxbtUiI/Paytm-losses-swell-69-to-Rs1490-crore-in-FY18.html">advertising and promotional expenses</a> covering ₹2.9 billion of the total expense for FY18 as well as ₹5.4 billion towards employee expenses including salary hikes, provident funds and gratuity payments.<br /><br />The company’s online retail business, Paytm mall, which is the third biggest e-commerce retailer in India, deteriorated with a <a href="https://www.livemint.com/Companies/2qbxHBTEys8gGM6uU83wcK/Paytm-Malls-loss-rises-150-times-to-1787-crore-in-FY18.html">loss of ₹1,787 crore</a> on the total revenue. Paytm mall has been putting in all efforts to compete with the players Amazon India and Walmart Inc.’s Flipkart. Nearly 60% of its sales are recorded from offline stores. According to a recent report, Paytm mall has 10 million merchants and is expected to double within a year.<br /><br />The company seems to be looking at a broader aspect of growth since it has launched a mobile-based payment facility ‘PayPay’ in collaboration with SoftBank and Yahoo Japan to get into the global markets. The Paytm founder indicated that they are now going to plan their entry in Europe as their long-term agenda is the expansion of the number of users that roll into electronic transactions.<br />

Paytm’s losses increased exponentially in FY18 thanks to advertising, personnel costs

<ul><li><keyword id="6357120" type="DEFINITION" weightage="20" keywordseo="paytm">Paytm</keyword>’s revenue rose to ₹3,579.67 crores from ₹3,309.61 crores last year. </li><li>However its expenditure also grew to hit ₹7,730.41 crores. </li><li>Paytm, which was a sponsor for the ICC cricket world cup, had also recently won the bid for BCCI matches for ₹326.80 crores. </li></ul>One97 communications which owns Paytm has posted losses to the tune of ₹4,217 crore, according to <a href="https://www.livemint.com/companies/start-ups/paytm-s-losses-almost-triple-to-4-217-cr-in-fy19-as-expenses-rise-1568051301932.html">reports</a>. <br /><br />While Paytm’s revenues rose to ₹3,579 crore from ₹3,309 crores last year, its losses widened because of its growing expenses which hit ₹7,730.41 crore. <br /><br />A <a href="https://www.livemint.com/companies/start-ups/paytm-s-losses-almost-triple-to-4-217-cr-in-fy19-as-expenses-rise-1568051301932.html">Mint</a> report quoted Paytm from its annual report where it said it “has incurred huge capital expenditure in creating a brand and establishing its business activity. We have incurred a considerable amount in various capital and operational expenditures which resulted into losses during the financial year.” <br /><br />In its bid for branding, Paytm has definitely gone a step ahead. It bagged the title sponsorship for BCCI’s international and domestic matches for which the winning bid was at a price of ₹326.80 crores to be paid for 2019-23 home season. Paytm was also one of the sponsors for the ICC Cricket World Cup. <br /><br />Meanwhile, One97 Communications is also in talks to acquire Rana Kapoor’s stake in Yes Bank according to <a href="https://timesofindia.indiatimes.com/business/india-business/paytm-owner-one97-in-talks-to-pick-up-stake-in-yes-bank/articleshow/71056608.cms">reports</a>.<br /><br />Paytm along with its subsidiaries Paytm Mall and Paytm Money, have all been striving for profitability. <a href="https://www.livemint.com/companies/news/paytm-to-start-planning-ipo-in-22-24-months-says-ceo-vijay-shekhar-sharma-1567756975624.html">Paytm </a>founder <keyword id="198636" type="PERSON" weightage="20" keywordseo="Vijay-Shekhar-Sharma">Vijay Shekhar Sharma</keyword> had also mentioned that the company will start preparing for an initial public offer, saying that an IPO is ‘inevitable’.

Paytm posts a massive ₹4,217 crore loss as it continues to spend on branding

<keyword id="3519905" type="General" weightage="20" keywordseo="paytm-ceo" source="Orion">Paytm CEO</keyword> <keyword id="198636" type="General" weightage="20" keywordseo="vijay-shekhar-sharma" source="Orion">Vijay Shekhar Sharma</keyword> has said that macro conditions have affected global fintech companies, including <keyword id="6357120" type="General" weightage="20" keywordseo="paytm" source="Orion">Paytm</keyword>, but the fintech industry will soon bounce back, driven by payments revenue.<br /><br />Speaking at IAMAI's 'India Digital Summit 2022', Sharma said, "We are a payments company and everyone understands it and payment has a derivative revenue line item in financial services and is driven by credit."<br /><br />"The success of Paytm will depend on what we do with monetisation, led by financial services. Payment is a revenue line item which is growing massively," he emphasised on Wednesday.<br /><br />Sharma said that globally, we probably went in at a time (for the public IPO) when QE, free money and many other parameters brought in a little bit of spookiness into the market, in terms of pricing.<br /><br />"Some South American companies are 70 per cent down. Well, that's not the reason for it completely, that's a macro reason," Sharma said.<br /><br />Globally, fintech players and emerging market players saw weak support from the markets as PayPal, Afterpay, Affirm, Square and many others were down almost 30 per cent on an average.<br /><br />Most recently, Grab, the Singapore-based company, made its market debut and is also a 'super app' saw its share price drop by over 20 per cent on listing day.<br /><br />Paytm made a big bang debut in the stock market. The company's $2.5 billion IPO was not just India's largest but also the largest APAC fintech IPO ever and also the second largest fintech IPO of 2021 globally.<br /><br />Overall, <keyword id="8069901" type="General" weightage="20" keywordseo="paytm-ipo" source="Orion">Paytm IPO</keyword> is the fourth largest fintech stock debut.<br /><br />"Paytm, which opened at an offer price of Rs 2,150 braved the markets on a tough day and its share price was also impacted. But Paytm came out stronger than how most other fintech companies fared during the same time," said Dr Ravi Singh, Research Head, Share India.<br /><br />Analysts at JP Morgan, Goldman Sachs and Morgan Stanley have assigned a 'BUY' rating to the Paytm stock with a target price of Rs Rs 1,630-Rs 1,875.<br /><br />The company during its second quarter earnings results showed how its revenue grew by 64 per cent on a yearly basis to Rs 10.9 billion.<br /><br />During the July-September quarter, Paytm saw its contribution profit grow to Rs 2.6 billion in Q2 FY 2022, year-on-year increase of 592 per cent. The contribution margin jumped to 24.0 per cent of revenue from 5.7 per cent the previous year.<br /><br />"Paytm has grown to be a financial services giant, which brings with it more monetizable opportunities. The share price of the company will correct itself as the company grows as has been seen in the market journey of US tech companies like Facebook and Tesla," said Singh.<br /><br />The company in a recent filing said that its lending business saw 4.4 million loan disbursals through the platform (y-o-y growth of 401 per cent), and value of Rs 21.8 billion (run-rate of $1.2 billion) (y-o-y growth of 365 per cent).<br /><br />The company's GMV for Q3 FY 2022 stood at Rs 2,501 billion ($33.6 billion).<br /><br />"Year-to-date GMV is already higher than all of FY 2021 , led by significant non-UPI GMV growth," said the company in its regulatory filing.<br /><br /><strong>SEE ALSO</strong><br /><br /><a href="https://www.businessinsider.in/business/corporates/news/zomato-offers-12-lakh-insurance-grant-to-family-of-delivery-executive-killed-in-a-road-accident/articleshow/88874578.cms" data-type="tilCustomLink">Zomato employees will contribute ₹12 lakh to the family of delivery partner who was killed in a road accident</a><br /><br /><a href="https://www.businessinsider.in/business/startups/news/swiggy-will-deliver-stuff-on-tvs-motors-electric-scooters-following-footsteps-of-zomato-amazon-and-flipkart/articleshow/88872404.cms" data-type="tilCustomLink">Swiggy will deliver stuff on TVS Motors’ electric scooters</a><br /><br /><a href="https://www.businessinsider.in/tech/enterprise/news/tcs-vs-infosys-vs-wipro-how-indias-three-it-giants-stack-up-against-each-other/slidelist/88860676.cms" data-type="tilCustomLink">TCS vs Infosys vs Wipro Q3 results – here’s how India’s three IT giants stack up against each other</a><br />

Global market conditions affected Paytm's IPO: Vijay Shekhar Sharma

2019 roundup so far: Startups are growing bigger but by widening losses

<ul><li>Zomato had a higher market cap than One97 Communications, the listed parent of the digital payments giant <keyword id="6357120" type="General" weightage="20" keywordseo="paytm" source="Orion">Paytm</keyword>.</li><li>Part of the sell-off in <keyword id="4326962" type="General" weightage="20" keywordseo="paytm-shares" source="Orion">Paytm shares</keyword> could also be a reflection of the market mood.</li><li>But, there is a lot more that the street is worried about.</li><li>Founder <keyword id="198636" type="General" weightage="20" keywordseo="vijay-shekhar-sharma" source="Orion">Vijay Shekhar Sharma</keyword> wants the market to be excited about Paytm as a superapp but many others have argued that a smartphone itself is a super app.</li><li>Check out the latest news and updates on<a href="https://www.businessinsider.in/stock-market"> Business Insider</a>.</li></ul>Two of India’s most-awaited tech IPOs, that of Zomato and Paytm, came with a lot of anxiety around the price at which the shares were being sold to the first lot of public investors. Zomato still made some money for those who got the shares in the initial public offering (IPO) but those who got shares in the Paytm IPO have lost 27% on the opening day. <br /><br />By noon, Zomato had a higher market cap than One97 Communications, the listed parent of the digital payments giant Paytm. The overall market mood played a role in pushing down Paytm’s share price, Deven Choksey, managing director of KR Choksey Shares and Securities, told Business Insider. The sell-off seen earlier in the week intensified on Thursday (the day of Paytm’s market Debut) and 42 out of the Nifty 50 stocks were in the red. But that’s not the only reason why people sold Paytm shares. <br /><br /><table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company<br /><br /></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Valuation pre-IPO<br /><br /></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Valution sought in IPO</td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Market cap, as on November 18<br /><br /></td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Zomato<br /><br /></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$5.8 billion<br /><br /></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$8.1 billion</td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,21,731 crore ($16.3 billion)<br /><br /></td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Paytm<br /><br /></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$16 billion<br /><br /></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$19.9 billion</td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,01,399 crore ($13.6 billion)<br /><br /></td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source: Companies, BSE<br /><br />It’s not that Paytm's advisors didn't see it coming. According to a Bloomberg report <a href="https://www.businessinsider.in/business/news/paytm-may-drop-its-pre-ipo-sale-as-advisors-recommend-lower-valuation/articleshow/87187525.cms">published in October</a>, Paytm was advised to go for a lower valuation than $20 billion in its pre-IPO round but the company decided to skip the round altogether. Even stock brokerage firm Macquarie had given Paytm a with an underperform rating, and projected that the stock may fall to as much as ₹1,200 (compared to an issue price of ₹2,150) any time in the next one year .<br /><br />Interestingly, Paytm was the highest valued Indian startup between 2019 to me this year. The company got a valuation of $19.9 billion in its public issue. The only smile that Paytm believers could steal was thanks to the meme fest on Twitter.<br /><br />                          <div type="image" title="Zomato is now bigger than Paytm — reasons why the market is not excited about Vijay Shekhar Sharma’s vision of a superapp" msid="87778007" hostid="261"></div><br />The drop in Paytm’s share price led to a fall of the stock market. “Today’s fall in the market is also largely due to collateral damage, Paytm loss to investors,” Deven Choksey, managing director of KRChoksey Shares and Securities said.<br /><br />Manoj Dalmia, founder and director of Proficient Equities Private Limited also highlighted three reasons behind Paytm’s weak listing on the stock exchange. The issue ranges from high valuation to intense competition.<br /><br />These are some of the issues pointed out by Manoj Dalmia of Proficient Equities, Scenes by Avalon’s Shashank Udupa, TaxationHelp.in’s Neha Nagar<br /><br /><table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Issue<br /><br /></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Reason<br /><br /></td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Overvaluation <br /><br /></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">The company is overvalued at a Price to Sales (P/S) value of 26 compared to its global peers, who have a P/S of 0.3-0.5<br /><br /></td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Limited promoters in India<br /><br /></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nearly 75% of the promoters of Paytm are from other countries and are selling shares worth ₹10,000 crore, which is more than 50% of the issue.<br /><br /></td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Not a market leader<br /><br /></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Paytm is not a market leader in any business it operates in.<br /><br /></td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Analyst rating<br /><br /></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Falling grey market premium and Macquarie's downrating has pushed the stock into a downward momentum. <br /><br /></td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Lack of focused business model<br /><br /></td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">It is present in all over the Fintech space but not doing well in any of them while the competition is rising from players like Google, Amazon, PhonePe. <br /><br /></td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table><br />Dalmia is not alone in his pessimism around Paytm’s near-term prospects. “Dabbling in multiple business lines inhibits PayTM from being a category leader in any business except wallets, which are becoming inconsequential with the meteoric rise in UPI payments. Competition and regulation will drive down unit economics and/or growth prospects in the medium term in our view,” Macquarie Research analysts Suresh Ganapathy and Param Subramanian said. <br /><br /><strong>ALSO WATCH: Even the biggest of conglomerates find it difficult to do more than two things right, market expert Saurabh Mukherjea told Business Insider. <br /></strong><br />                            <div type="Youtube" id="kSf5f3gXjKg" title="A ₹3,000-crore fund manager explains why he won&amp;#39;t buy RIL, why he sold ITC and bought HDFC Life" thumbUrl="https://i.ytimg.com/vi/kSf5f3gXjKg/mqdefault.jpg"></div><br />Paytm is one of the biggest digital payments companies in India with offerings across several digital modes of payments like unified payments interface (UPI), credit and debit cards payments. It also offers wealth management solutions through Paytm Money and banking services through Paytm Payments Banks.The company has 333 million total customers, 114 million annual transacting users and 21 million registered merchants. <br /><br />Paytm has a strong market share in digital payments via the unified payments interface (UPI) but the margin is zero in peer-to-peer payments and wafer thin when merchants get paid. <br /><br />In the personal finance space ⁠— where Paytm sells mutual funds, gold and stocks ⁠— it has a less than 1% market share and makes zero commission, according to Macquarie. In insurance, only one out of 100 policies are sold online and Paytm is pitted against an early bird like Policybazaar as well as legacy banks, which dominate the space.<br /><br />Paytm aims to make money from its lending business. “Since Paytm will largely be engaged in selling down these loans to partner banks or NBFCs (non-banking financial companies) balance sheets, the addressable fee pool is much lower,” said Macquarie, which pegged the potential market for buy now, pay later schemes to be anywhere between $45 billion and $50 billion by March 2026.<br /><br />                            <div type="image" title="Zomato is now bigger than Paytm — reasons why the market is not excited about Vijay Shekhar Sharma’s vision of a superapp" msid="87778072" hostid="261"></div><br />Despite a massive user base, the company’s revenue has been marginally declining on a year-on-year (YoY) basis. The company reported a revenue of ₹3,186 crore, with net loss of ₹1,761 crore. “Loss-making businesses will find it hard to sustain premium valuations,” Choksey added.<br /><br />Ravi Singh, head of research and vice president at ShareIndia, noted that Paytm’s future growth is a key to watch for long term investors. “We advise the investors after looking at the overall valuations and earlier losses of Paytm, to book their positions and wait for 1700-1600 levels for fresh investment. Retail investors may remain cautious as the overall market is in profit booking zone pushing maximum stocks in downside territory,” he added. <br />                            <div type="image" title="Zomato is now bigger than Paytm — reasons why the market is not excited about Vijay Shekhar Sharma’s vision of a superapp" msid="87778081" hostid="261"></div><br />“People ask me how do you raise money at such a high price? I say, I don’t raise money on a price but I raise money on a purpose,” founder and chief executive officer Vijay Shekhar Sharma. He wanted India to be as excited about his dream of a super app for anything that can be bought and sold online. <br /><br />But many others have argued that a smartphone itself is a super app. Another startup founder Kavin Mittal, the man behind the $1.4 billion Hike Messenger, had similar ambitions but found it to be a misguided goal and dropped the plan in January 2021. <br /><br />Will Sharma prove his detractors wrong with Paytm? Only time will tell. <br /><br /><strong>SEE ALSO:<br /></strong><a href="https://www.businessinsider.in/stock-market/news/paytm-ipo-listed-at-discount-of-9-starts-trading-at-1955/articleshow/87772082.cms" data-type="tilCustomLink">India’s biggest IPO lists 9% below the IPO price and it may fall even further, warn analysts</a><br /><br /><a href="https://www.businessinsider.in/business/startups/news/paytm-shares-listing-below-ipo-price-but-experts-say-not-to-invest/articleshow/87762352.cms">Paytm is likely to list below IPO price and experts advice serious investors to wait a while before buying</a><br /><br /><a href="https://www.businessinsider.in/business/corporates/news/itc-reportedly-plans-to-spin-out-it-business-itc-infotech/articleshow/87758056.cms">ITC has a ₹2,500 crore IT business hiding in plain sight and that makes the street go Yippee!</a><br />

Zomato is now bigger than Paytm — reasons why the market is not excited about Vijay Shekhar Sharma’s vision of a superapp

<ul><li><keyword id="4225623" type="PERSON" weightage="20" keywordseo="Paytm-Mall">Paytm Mall</keyword> has reportedly unearthed a fraud of ₹5 to ₹10 crore, after the probe by auditing giant EY. </li><li>Few of <keyword id="6357120" type="DEFINITION" weightage="20" keywordseo="paytm">Paytm</keyword> Mall employees worked with third party vendors to avail cashback offers, say reports.</li><li>The company had earlier said that it has partnered with E&amp;Y to build a technology driven fraud prevention system.</li></ul>In what could possibly be one of the biggest blows for every Indian startup’s favourite cashback scheme, Paytm Mall has reportedly unearthed a fraud of ₹10 crore. According to reports, few of Paytm Mall employees worked with third party vendors to avail cashback offers.<br /><br />"After Diwali, what my team saw was that there were some small sellers who were getting a large percentage of the cashbacks and we as a team asked our auditors to do a deeper audit," Paytm founder <keyword id="198636" type="PERSON" weightage="20" keywordseo="Vijay-Shekhar-Sharma">Vijay Shekhar Sharma</keyword> told <a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/paytm-probe-reveals-at-least-rs-10-cr-fraud-vijay-shekhar-sharma/articleshow/69327442.cms">reporters</a> at a press conference in Mumbai. The event was held to launch Paytm’s cashback card driven by Citibank. <br /><br />Paytm Mall has fired about 10 employees and delisted over 100 vendors from its platform, according to one <a href="https://timesofindia.indiatimes.com/business/india-business/paytm-probe-reveals-at-least-rs-10-cr-fraud-vijay-shekhar-sharma/articleshow/69327250.cms">report.</a> <br /><br />Paytm Mall, however, clarified later that fraud was in the range of ₹5-10 crores. The company had earlier said that it has partnered with E&amp;Y to build a technology-driven fraud prevention system. The company had released an official statement regarding its partnership with E&amp;Y, which will help build Paytm Mall a secure network for its users.<br /><br />In the Indian e-commerce industry, while cashback has been a boon to bring on board a huge number of users, it has also proved to be a bane for companies that are struggling with losses due to these offers. In the same breath, Sharma insisted that the cashback model remains sustainable. <br /><br />Paytm Mall had aggressively grown to bring on board many vendors in its fight against the likes of Flipkart and Amazon. However, it had run into trouble with huge losses and there were reports about Paytm Mall shutting down. In an<a href="https://www.businessinsider.in/facing-jio-paytm-founder-vijay-shekhar-sharma-plans-a-ticket-to-us/articleshow/69053166.cms"> earlier interview with Business Insider</a>, Sharma had said that the vertical was back on track and having switched to the Online to Offline (O2O) model, they had offloaded multiple vendors from the Paytm Mall platform.<br /><br /><strong>See Also:</strong><br /><a href="https://www.businessinsider.in/paytm-partners-with-ey-to-probe-frauds/articleshow/69305406.cms">Paytm Mall ropes in auditing giant EY to crack down on frauds</a><br /><a href="https://www.businessinsider.in/facing-jio-paytm-founder-vijay-shekhar-sharma-plans-a-ticket-to-us/articleshow/69053166.cms">‘I want it all and I want it now’, says Paytm founder Vijay Shekhar Sharma as he plans a ticket to the US</a><br />

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Zomato is now bigger than Paytm — reasons why the market is not excited about Vijay Shekhar Sharma’s vision of a superapp

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Paytm Mall fires 10 employees and 100 vendors after a million-dollar cashback fraud

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