Their leadership in payments and diversification towards e-commerce, cloud services and financial services should ensure high growth for the company in the coming years," he reasoned. “This is a high-growth story which still has miles to go. The fresh issue of funds, after reduction of issue expenses, will be utilised for strengthening the Paytm ecosystem (including through acquisition and retention of consumers and merchants and providing them with greater access to technology and financial services) and investing in new business initiatives, acquisitions and strategic partnerships.Īmong experts, only Divam Sharma, Co-founder of Green Portfolio, advised investors who got allotment to look at Paytm as a long-term allocation. The Rs 18,300-crore public issue comprised a fresh issue of Rs 8,300 crore and an offer for sale (OFS) of Rs 10,000 crore by selling shareholders, including several investors. We do not advise investors to jump in, expecting a quick return." "We believe long-term investors will get better entry points over the next 12 months as the company starts sharing its operating performance with investors every quarter. Meena believes Bajaj Finserv has a proven track record, with great valuation comfort, compared to Paytm.Īlso read: Scenes from Paytm's listing: Laughter and joy amid falling sharesĪbhay Agarwal, Founder and Fund Manager, Piper Serica, also feels that for short-term investors, there is no big immediate upside, and advised them to exit and explore other opportunities. I believe Bajaj Finserv is a much better option to play on the fintech business," Meena said. "By the time the market understand the way to value such kinds of businesses and how fast it will become profitable and how well it will use its strength to explore new businesses like credit cards and payment banking, I would advise only aggressive investors to hold this stock for the long term. It is difficult to value such kind companies, for the time being, he says. Paytm is the largest payments platform in India with a gross merchandise value of Rs 4.03 lakh crore in FY21, having an overall mobile payments transaction volume market share of approximately 40 percent, and wallet payments transaction market share of 65 -70 percent in India as of FY21.
Its payment and financial services segment contributed to 75.3 percent and 77.4 percent of total revenue in FY21 and the June 2021 quarter, respectively. But the company has shown significant growth in revenue, at Rs 948 crore, in Q1FY22, compared to the Rs 649.4 crore in the corresponding quarter of last fiscal. On a quarterly basis, consolidated loss widened to Rs 381.9 crore in Q1FY22, from a loss of Rs 284.4 crore in Q1FY21. Total income, at Rs 3,186.8 crore, for FY21 was lower, compared to Rs 3,540.7 crore in FY20 and Rs 3,579.7 crore in FY19. Paytm, formally known as One 97 Communications, reported a consolidated loss of Rs 1,701 crore for financial year FY21, which was lower than the Rs 2,942.4 crore loss posted in FY20, and a loss of Rs 4,230.9 crore in FY19.
We feel the company sought the high valuation on the strength of its brand and it might see a correction in the near term," he said. “New investors are advised to look for peers that may perform much better than Paytm. However, investors who applied for listing gain can exit on the bounce-back, he advised. Parth Nyati, Founder of Tradingo, feels the company has been loss-making and there is no sign that it might turn profitable in the near future.Īggressive investors who got the allotment can hold the stock with a long-term view. So, long-term investors can exit and wait for declines," he adds. "Short-term investors might remain in this counter as we might see some pullback, but we don't expect any long-term momentum. Therefore, we saw a tepid response in terms of subscriptions," says Santosh Meena, Head of Research, Swastika Investmart. However, it is still a loss-making company and very aggressively priced. "The company has a huge customer base with strong brand positioning and it has an early- mover advantage in digital payment services. Pharma Industry Conclave Unlocking opportunities in Metal and MiningĪlso read: Vijay Shekhar Sharma chokes up as he speaks at Paytm listing ceremony.Interview Series Business In The Week Ahead.
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