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New Delhi: Online food delivery platform <keyword id="19901323" type="General" weightage="100" keywordseo="Zomato" source="keywords" meta.keywordsubtype="org" meta.entityname="Zomato" meta.hostid="83" meta.entityid="Zomato">Zomato</keyword> will acquire <keyword id="19898109" type="General" weightage="20" keywordseo="Paytm" source="keywords" meta.keywordsubtype="org" meta.entityname="Paytm" meta.hostid="83" meta.entityid="Paytm">Paytm</keyword>'s entertainment <keyword id="20028334" type="General" weightage="20" keywordseo="ticketing" source="keywords">ticketing</keyword> business for Rs 2,048 crore to strengthen its "going-out" segment in a deal that will help the troubled fintech firm to sharpen its focus on core payments and financial services distribution. Paytm's entertainment ticketing business covers movies, sports, and events (live performances). <br /><br />The boards of Zomato and One 97 Communications Ltd (OCL) have approved the all-cash deal. <br /><br />As part of this agreement, OCL's entertainment ticketing business will transfer business to its 100 per cent subsidiaries Orbgen Technologies Pvt Ltd (OTPL) and Wasteland Entertainment Pvt Ltd (WEPL), followed by the sale of 100 per cent stake in these subsidiaries (which operate the TicketNew and Insider platforms) to Zomato. <br /><br />Subsequently, Zomato will spin off the new business into a new app called 'District'. <br /><br />Under the deal, Zomato will fully acquire Orbgen Technologies Pvt Ltd (OTPL), which is into movie ticketing, for Rs 1,264.6 crore and buy Wasteland Entertainment Pvt Ltd, which is into events ticketing for Rs 783.8 crore. <br /><br />The combined entertainment ticketing business has a scale of Rs 297 crore in revenue and Rs 29 crore in adjusted EBITDA in FY24. <br /><br />"The transfer will also include around 280 existing employees from the entertainment ticketing business," OCL said in a statement, adding that the transaction generates significant profits for Paytm and cash proceeds will further strengthen the balance sheet. <br /><br />Announcing the deal, Paytm said it allows the fintech to strengthen its focus on core payments and financial services distribution. Paytm said with its strong focus on long-term value creation, the company remains confident in substituting revenue from its entertainment ticketing business by expanding core business areas of payments and financial service distribution. <br /><br />"This move allows us to continue focusing on long-term growth in our core areas and value creation for all stakeholders," a Paytm spokesperson said. <br /><br />On the other hand, Zomato Managing Director and CEO <keyword id="19901325" type="General" weightage="20" keywordseo="deepinder-goyal" source="keywords">Deepinder Goyal</keyword> in a letter to shareholders said, "The proposed acquisition helps us add more scale and offer newer use-cases (like movie and sports ticketing) to our customers in this segment". <br /><br />Zomato believes the deal makes it more relevant to its customers and gives an opportunity to spin off the business into a new app. <br /><br />"We are going to call it District, which could be a game changer for each of these use cases given the need for a single brand as a destination in this segment," Goyal added. <br /><br />Zomato is keen to position 'District' as the brand that consumers turn to when they are thinking of going out, he added. <br /><br />OTPL was incorporated on November 23, 2007, in India. It is in the business of listing and sale of movie tickets and other services. It had a turnover of Rs 13.14 crore in the fiscal ended March 31, 2024. <br /><br />WEPL was incorporated on December 21, 2015. It is in the business of listing and sale of event tickets and other services. Its turnover in the FY24 was Rs 236.03 crore. <br /><br />Paytm said the move to sell its entertainment ticketing business underscores its core focus on payments and financial services distribution. <br /><br />"In recent quarters, the company has also expanded its offerings in insurance, equity broking, and wealth distribution, with a significant opportunity to cross-sell these services and grow its market presence as a leading financial services distribution player," Paytm said. <br /><br />During a transition period (up to 12 months), the movie and event tickets will continue to be available on the Paytm app, as well as on the TicketNew and Insider platforms, ensuring a smooth and uninterrupted experience for users and merchant partners. <br /><br />Paytm said the deal underscores its success in building businesses and creating value for shareholders. <br /><br />Zomato's Goyal said the District app is expected to be launched anytime in the next few weeks. <br /><br />Post this acquisition, he said Zomato's going-out business would be spread across multiple different platforms. <br /><br />Its existing going-out business (dining-out + event ticketing) would continue to run on the Zomato app, and the acquired business -- movie, sports and event ticketing -- would continue to run on Paytm's main app for a transition period of up to 12 months, along with Insider and TicketNew apps. Both of these would get transferred to Zomato as part of the transaction. <br /><br />District app will duplicate the offerings above and over time, we will gradually nudge our customers to move from the Zomato, Paytm, Insider, and TicketNew apps to the District app. <br /><br />"Once most customers start transacting on the District app, we will remove the duplication and shut down this business on all the other apps. Eventually, there will just be a button to launch the District app on the Zomato app (like it is for Blinkit today) so that we continue to tap into the large customer base of Zomato," he added.

Zomato to acquire Paytm's entertainment ticketing business for Rs 2,048 crore

<keyword id="19947542" type="General" weightage="20" keywordseo="One-97-Communications" source="keywords" meta.keywordsubtype="org" meta.entityname="One 97 Communications" meta.hostid="261" meta.entityid="One 97 Communications">One 97 Communications</keyword>, that operates popular fintech brand <keyword id="19898109" type="General" weightage="20" keywordseo="Paytm" source="keywords" meta.keywordsubtype="org" meta.entityname="Paytm" meta.hostid="261" meta.entityid="Paytm">Paytm</keyword>, reported a 25 per cent rise in revenue at Rs 9,978 crore in the just concluded financial year 2023-24.<br /><br />The company attributed the growth to GMV growth, device additions, and growth in the financial services distribution business.<br /><br />Since its IPO, when the company went public, it for the first full year EBITDA before ESOP profitability of Rs 559 crore, its earnings results released Wednesday showed.<br /><br />In the January-March quarter, however, Paytm reported a revenue of Rs 2,267 crore, a modest decline of 3 per cent year-on-year.<br /><br />"In Q4 FY 2024, we had lower marketing spends, as we paused most of the user growth spending in the month of February and March. We expect to reinvest in these areas in the coming financial year," Paytm informed stock exchanges.<br /><br />"While we experienced a financial impact in Q4 due to the above disruptions, the full financial impact will be seen in Q1 FY 2025."<br /><br />Paytm says it is confident of seeing meaningful improvement starting from Q2 2024-25, based on restarting certain paused products and achieving steady growth in operating metrics.<br /><br />In Q1 of the current fiscal, its focus will be on acquiring new merchants, reactivation of inactive merchants, and redeployment of devices from inactive merchants to new merchants.<br /><br />"While there will be a smaller net addition of device merchants in Q1 FY 2025, we expect net additions to improve from thereon and recover to past trendlines by Q3 FY 2025."<br /><br />Its revenue from payment services were up 26 per cent to Rs 6,235 crore; net payment margin was up 50 per cent to Rs 2,955 crore; gross merchandise value (GMV) up 39 per cent to Rs 18.3 lakh crore.<br /><br />Merchant paying subscriptions for devices have reached 1.07 crore as of March 2024, an increase of 39 lakh.<br /><br />Revenue from financial services and others up 30 per cent to Rs 2,004 crore; value of loans distributed was up 48 per cent to Rs 52,390 crore.<br /><br />Further, Paytm said that the active rate and per device subscription revenue has been impacted. Merchant subscription revenue in Q4 was Rs 90 per device per month and it expects it to bottom out at Rs 80 in Q1, post which it should increase towards Rs 100 by Q4 of the current fiscal.<br /><br />"We continue to address our merchants' needs through innovative product launches and are backed by a large distribution and service network. We recently launched two more "Made in India" soundboxes which are customized to the needs of our merchants, with louder speakers and longer battery life."<br /><br /><b>SEE ALSO:<a href="https://www.businessinsider.in/stock-market/webstories/awfis-space-solutions-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/110305597.cms" target="_blank"></a></b><br /><br /> <b><a href="https://www.businessinsider.in/stock-market/webstories/awfis-space-solutions-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/110305597.cms" target="_blank">Awfis Space Solutions IPO – Price band to risk factors, all you need to know</a><a href="https://www.businessinsider.in/sports/webstories/rajasthan-royals-vs-royal-challengers-bengaluru-head-to-head-record-key-players-and-more/slidelist/110298325.cms" target="_blank"></a></b><br /><br /> <b><a href="https://www.businessinsider.in/sports/webstories/rajasthan-royals-vs-royal-challengers-bengaluru-head-to-head-record-key-players-and-more/slidelist/110298325.cms" target="_blank">Rajasthan Royals vs Royal Challengers Bengaluru: head-to-head record, key players and more</a><a href="https://www.businessinsider.in/tech/news/indias-pc-market-grows-by-2-6-in-q1-2024-recording-third-consecutive-quarter-with-growth/articleshow/110292150.cms" target="_blank"></a></b><br /><br /> <b><a href="https://www.businessinsider.in/tech/news/indias-pc-market-grows-by-2-6-in-q1-2024-recording-third-consecutive-quarter-with-growth/articleshow/110292150.cms" target="_blank">India's PC market grows by 2.6% in Q1 2024, recording third consecutive quarter with growth</a></b><br />

Paytm registers 25% growth in revenue at ₹9,978 crore in 2023-24

<ul><li>Zomato's share price dipped another 10% on Monday, January 24.</li><li>The company's shares were trading at ₹102 at 9:42 a.m.</li><li>The company had fallen below its listing price on Friday.</li></ul>The sell-off in Indian equity markets has taken the wind out of some of the hottest tech startups that got listed in the last few months. Most of them, including Zomato, Nykaa and PolicyBazaar, are trading way below their listing price and much of the gash has come in the last three weeks, <br /><br />On January 24, one of the top losers in this basket was Zomato, which fell 18%. Analysts like Abhay Agarwal, founder and fund manager at Piper Serica, <a href="https://www.livemint.com/market/stock-market-news/why-zomato-shares-have-plunged-over-12-in-5-days-should-you-buy-the-stock-11642751883576.html">believe</a> that this fall in the markets is driven primarily by market correction in Nasdaq over the last month. <br /><br />The market cap of the food aggregator dropped to ₹74,109 crore (almost $10 billion) compared to the peak valuation of <a href="https://www.google.com/amp/s/m.economictimes.com/tech/tech-bytes/zomato-nykaa-shares-hit-all-time-highs/amp_articleshow/87666388.cms">$15 billion </a>on November 12.<br />  <div type="image" title="There are huge discounts on Nykaa, Zomato and shares of other listed tech startups" msid="89088052" hostid="261"></div><br />It's not just Zomato, other tech companies like Policybazaar, MapmyIndia (CE Info Systems) and Paytm are facing similar trends too.<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;">Listing Price<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;">Current Price<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;">Change since Dec 31<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;">₹116 <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;">₹92.95<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;">-34%<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;">Nykaa<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;">₹2,001 <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;">₹1,776 <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;">-13%<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;">₹1,950 <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;">₹921 <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;">-31%<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;">PolicyBazaar<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;">₹1,150 <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;">₹822 <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;">-13.7%<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;">MapmyIndia<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;">₹1,581<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;">₹1,502 <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;">-17.4%<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;">EaseMyTrip<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;">₹212.25 <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;">₹543 <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;">+7.20%<br /><br /></td></tr></tbody><tbody></tbody></table>Note: Share price at 11:06 am on January 24<br />Source: BSE<br /><br />The shares of beauty and cosmetics ecommerce company Nykaa hit an all-time low as its shares fell down to ₹1,776 on Monday. The shares of Nykaa have shed 30% of their value from the record high of ₹2,574 touched on November 26. <br /><strong><br />SEE ALSO</strong><br /><a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-results-q3-fy22-profit-revenue-subscriber-growth/articleshow/89034299.cms">Reliance Jio is making the most money it has ever made from its subscribers</a><br /><a href="https://www.businessinsider.in/business/telecom/news/government-owning-vodafone-idea-is-just-half-the-task-the-other-half-is-to-find-the-money/articleshow/88836355.cms">Government owning Vodafone Idea is just half the task – the other half is to find the money</a><br /><a href="https://www.businessinsider.in/business/telecom/news/we-finally-know-why-the-vodafone-idea-stock-rallied-over-50-in-the-last-one-month/articleshow/88311430.cms">We finally know why the Vodafone Idea stock rallied over 50% in the last one month</a><br />

There are huge discounts on Nykaa, Zomato and shares of other listed tech startups

<keyword id="6357120" type="General" weightage="100" keywordseo="paytm" source="Orion">Paytm</keyword> is expected to be adjusted EBITDA positive in March 2023, two quarters ahead of the estimates and the company's guidance of September 2023.<br /><br />It is learnt that global investment firm <keyword id="6361649" type="General" weightage="50" keywordseo="goldman-sachs" source="Orion">Goldman Sachs</keyword> expects October-December 2022 to be another strong quarter for Paytm, with revenue growth of 45 per cent on a yearly basis, adding that its margins print in the quarter would further increase the markets' confidence around the company's ability to be profitable in 2023.<br /><br />Notably, the Paytm Super App continued to see growing consumer engagement with the average Monthly Transacting User for the quarter that ended December 2022 at 85 million, registering a growth of 32 per cent on a yearly basis.<br /><br />"Paytm's MTU (monthly transacting users), loan disbursals and devices deployed continue to surprise us positively, and we have further raised our estimates for these metrics...," Goldman Sachs said.<br /><br />Thus, it reiterated 'Buy' rating with revised share target price of Rs 1,120 over a period of 12-month horizon. It is currently trading at Rs 541 per share.<br /><br />The global investment firm believes the current share price continues to offer a compelling entry point into what it termed Paytm as <keyword id="3658" type="General" weightage="20" keywordseo="india" source="Orion">India</keyword>'s largest and one of the fastest-growing fintech platforms.<br /><br />Meanwhile, the total merchant <keyword id="2185962" type="General" weightage="50" keywordseo="gross-merchandise-value" source="Orion">Gross Merchandise Value</keyword> processed through the Paytm platform for the quarter that ended December 2022 aggregated to Rs 3.46 lakh crore (USD 42 billion), marking a year-on-year growth of 38 per cent.<br /><br />The number of loans grew 117 per cent yearly to 3.7 million for the month of December, and 137 per cent to 10.5 million cumulative loans for the three months ended December 2022.<br /><br />As a result, total disbursements for the three months ended December 2022 was Rs 9,958 cr, a growth of 357 per cent on the year.<br /><br /><strong>SEE ALSO:<br /><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/over-1600-techies-being-fired-a-day-on-average-in-january-says-tracking-site-layoffs-fyi/articleshow/97047713.cms">Over 1,600 techies being fired a day on average in January says tracking site Layoffs.fyi</a><br /></strong><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/indian-ceos-see-a-difficult-year-but-most-say-they-wont-go-for-job-or-salary-cuts-pwc-survey/articleshow/97046963.cms"><strong>Indian CEOs see a difficult year but most say they won’t go for job or salary cuts: PwC survey</strong></a><br />

Paytm may see profitability in March, two quarters ahead of expectation; Goldman Sachs raises target price

<ul><li>Shares of One 97 Communications have dropped another to ₹1298 at 12:13 p.m.</li><li>The company is currently sitting on a market cap of $11.2 billion, a significant drop from the $19.9 billion valuation of the issue.</li><li>Zomato, which was valued at $5.8 billion in the private market in February 2021, is now valued at $16.4 billion in the public market.</li></ul>The public listing of One 97 Communications — the parent company of digital payments giant <keyword id="6357120" type="General" weightage="20" keywordseo="paytm" source="Orion">Paytm</keyword> — has eroded $10 billion from the company’s valuation in the first two days of its debut on the stock market.<br /><br />The shares of Paytm were trading at ₹1298 at 12:13 p.m. on November 22, representing a drop of 17%. The company is currently sitting on a market cap of ₹84,032 crore ($11.2 billion).<br /><br />Notably,  global investment bank Macquarie had set the target price for Paytm at ₹1,200, which is 44% below the issue price of ₹2,150 . <br /><br /><keyword id="198636" type="General" weightage="20" keywordseo="vijay-shekhar-sharma" source="Orion">Vijay Shekhar Sharma</keyword>, commenting on the same report, <a href="https://www.youtube.com/watch?v=Q-VNvhlcyr8">told</a> CNBC TV18, “somebody who has not met us and has an opinion on us, is not my opinion to keep an opinion on that. I don’t comment on opinions, I comment on facts.” <br /><br />"We are a wholesome meal ‘Thalli’ (platter) with different varieties, while Macquarie is looking for a business model of pizza," he <a href="https://www.zeebiz.com/market-news/news-exclusive-what-did-paytm-md-ceo-says-after-weak-listing-know-his-opinion-on-macquarie-report-171119">told </a>ZeeBusiness.<br /><br />Shares of One 97 Communications — the parent company of digital payments giant Paytm — have dropped another 4.69% on November 22, trading at ₹1,490 at 9:34 a.m.<br /><br />The company is currently sitting on a market cap of ₹96,330 crore ($12.9 billion). The company’s shares had tanked 27% on the first day of listing on November 18. The company’s market cap dropped by nearly $7 billion on the first day of listing itself. <br /><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;">Timeline<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<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;">Valuation in private market<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></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;">Valuation at issue price of ₹2,150 <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<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;">Day 1 of listing<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;">$13.3 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;">Day 2* of listing<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;">$12.7 billion<br /><br /></td></tr></tbody><tbody></tbody></table><em>Source: Company, Stock Exchange</em><br /><em>*The data will be updated once the market closes at 3:30 p.m. </em><br /><br />Food delivery firm Zomato, which was valued at $5.8 billion in the private market in February 2021, is now valued at $16.4 billion in the public market.<br /><br />Several industry experts — including Manoj Dalmia of Proficient Equities, Scenes by Avalon’s Shashank Udupa, TaxationHelp.in’s Neha Nagar — have pinned Paytm’s expensive valuation, lack of a focused business model, limited promoters in India and analysts ratings as some of the factors behind the company’s bad performance in stock market on day one. <br /><br />You can read more on why the market is not excited about Vijay Shekhar Sharma’s vision of a superapp <a href="https://www.businessinsider.in/stock-market/news/zomato-is-now-bigger-than-paytm-reasons-why-the-market-is-not-excited-about-vijay-shekhar-sharmas-vision-of-a-superapp/articleshow/87777762.cms">here</a>.<br /><br />Sharma-led Paytm shared a list of business updates from October 2021, on Sunday night. It seems to have not made much of a difference for retail investors. <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;">Metrics<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;">October 2020<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;">October 2021<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;">Gross Merchandise Value (GMV)<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;">₹36,000 crore<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;">₹83,200 crore <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;">Monthly Transacting Users (MTU)<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;">4.7 crore<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;">6.3 crore<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;">Total Devices Deployed (Point-of-Sales and Soundbox)<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;">400,000<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;">1,400,000<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;">Number of loans disbursed through 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;">0.2 million<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;">1.3 million <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;">Value of loan disbursed through 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;">120 crore<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;">627 crore<br /><br /></td></tr></tbody><tbody></tbody></table>Source: Paytm<br /><br /><strong>SEE ALSO</strong><br /><a 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Paytm is inching closer to Macquarie's target of ₹1200

<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>When exercising your ESOP options, you need to pay for the shares at the exercise price.<br /></li><li>There may be an additional tax burden if the <keyword id="173739" type="General" weightage="20" keywordseo="esops" source="Orion">ESOPs</keyword> are provided at a value lower than the fair <keyword id="6463972" type="General" weightage="20" keywordseo="market-value" source="Orion">market value</keyword> at the time of vesting. <br /></li><li>If the company fails to perform well, or lacks successful liquidity events, the potential returns on ESOPs may remain unrealised. <br /></li></ul>When talking about the glitzy world of start-ups, a discussion on employee stock ownership plan (ESOPs), always comes up. In recent news Swiggy announced that it will buy back shares worth $50 million from employees. Also, Paytm granted 1.7 million new ESOPs to employees. A few weeks ago Flipkart announced a $700 million ESOPs payout. <br /><br />However, the world of ESOPs may not all be as rosy as it seems at first glance. ESOPs work in a certain way and there are a lot of factors which need to fall into place before an employee can make a profit out of them. Therefore, one needs to understand that with start-ups coming under a lot of pressure due to an uncertain economic scenario and a funding crunch, have ESOPs lost their charm?<br /><br />“ ESOPs are often offered to outstanding performers to foster a sense of ownership, and nowadays, start-ups use them as a means to attract and retain top talent. However, it is essential to be aware that some companies might also offer ESOPs to compensate for situations when they cannot offer competitive salaries,’ says Anjali Raghuvanshi, Chief People Officer, Randstad India, a HR consulting firm. <br /><br />What this essentially means is that when taking up a job offer, do note if ESOPs are a part of the salary package as this may come at the cost of foregoing some salary.<br /><br />It is important to understand two major risks associated with ESOPs. Let us take a look. <br /><br /><br /><cmsannotation type="cmsannotation" annotationid="You would need to fork out money upfront" comment="subhead" text="You would need to fork out money upfront"><span data-til="noop">You would need to fork out money upfront</span></cmsannotation><br /><br />Here is where owning ESOPs can get tricky. “There are two up-front costs you have to bear when you are exercising your ESOP options. The first cost is the amount you pay the company for those ESOPs,” says  BM Singh, ESOP Expert &amp; Managing Partner, BMSA, a consulting firm. <br /><br />Suppose an employee is granted 1,000 ESOP options by a company. The exercise price or strike price of each option is ₹100. This means that the employee can purchase the company's shares at ₹100 per share at a future date, regardless of the market price at that time. <br /><br />Now, let's assume that the market price of the company's shares increases to ₹150 when the employee decides to exercise their ESOP options. To exercise the options, the employee needs to pay the exercise price, which is ₹100 per share. The cost to the employee to exercise their ESOP options would be ₹100,000.<br /><br /><cmsannotation type="cmsannotation" annotationid="Additionally, there may be a tax implication" comment="subhead" text="Additionally, there may be a tax implication"><span data-til="noop">Additionally, there may be a tax implication</span></cmsannotation> <br /><br /><br />The next is the tax implication that arises here. If the ESOPs are granted at a value lower than the fair market value during vesting, there could be an extra tax burden, resulting in potential tax liabilities before fully realising the value of the ESOPs.<br /><br />“ESOPs are taxable in the hands of the employees as perquisite u/s 17(2) of the IT Act. The taxable amount of such perquisite would be the fair market value (FMV) of the shares (computed in accordance with Rule 3(8) of the IT Act) on the date of exercising such option less any amount paid by the employee for such ESOPs,” says Suresh Surana, Founder, RSM India, an audit, tax and consulting firm. <br /><br />In the above example, the employee would need to pay tax on the taxable amount of ₹50,000 at the applicable tax rate. The exact tax amount will depend on the individual's income tax slab rate.<br /><br /><cmsannotation type="cmsannotation" annotationid="A bigger concern" comment="subhead" text="A bigger concern"><span data-til="noop">A bigger concern</span></cmsannotation><br /><br />Poor company performance and uncertainty of liquidity events may render ESOPs worthless. <br /><br />“If the company fails to perform well or lacks successful liquidity events, the potential returns on ESOPs may remain unrealised, potentially impacting the value of the effort and time invested over the years, “ says Raghuvanshi. <br /><br />The value of ESOPs is closely tied to the company's performance and growth potential. If the company's value decreases, it can negatively impact the value of your stock options, potentially making it challenging to sell your shares at a profit.<br /><br />Hence, it is important for an employee to evaluate the future prospects and growth of a company before making a decision to exercise the option. When an employee exercises the options, he should have trust in the company's future growth and performance. <br /><br />“The employee should also be aware about the exit possibilities in case of unlisted shares i.e. buyback track record, funding rounds etc,” says Akhil Chandna, Partner, Tax, Grant Thornton Bharat, a professional services firm. <br /><br />When exercising ESOPs, it is thus essential to conduct a thorough assessment of the company's current performance and financial well-being. This evaluation helps the employee make informed decisions about exercising their options. “Any significant changes since joining could impact the decision,” says Raghuvanshi. <br /><br /><cmsannotation type="cmsannotation" annotationid="Risk of ESOPs are higher in an early stage start-up" comment="subhead" text="Risk of ESOPs are higher in an early stage start-up"><span data-til="noop">Risk of ESOPs are higher in an early stage start-up</span></cmsannotation><br /><br />If a start-up is bootstrapped or in the idea phase, the risks are higher. In that case ESOPs are merely paper money. As the different rounds happen, the value of the ESOPs and the probability of liquidity increases. <br /><br />“You should see at which stage of the start-up you are entering. At each phase the value of ESOPs is different. So if you are joining a company just on the basis of ESOPs and not getting a reasonable salary and the company is in its early stages, then you should also focus on the cash component,” says Singh. If it has reached the Series A or Series B funding stage, then you can consider the value of ESOPs when joining and can consider it an important part of your salary package.<br />

You Searched For "paytm market value" and got 7 results

Zomato to acquire Paytm's entertainment ticketing business for Rs 2,048 crore

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Paytm registers 25% growth in revenue at ₹9,978 crore in 2023-24

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There are huge discounts on Nykaa, Zomato and shares of other listed tech startups

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Paytm may see profitability in March, two quarters ahead of expectation; Goldman Sachs raises target price

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Paytm is inching closer to Macquarie's target of ₹1200

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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

Kritti Bhalla

Explained: What accepting ESOPs, especially if joining a start-up, might entail

Anagh Pal

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