Bengaluru: Vijay Shekhar Sharma blamed bad timing for a tepid response to Paytm’s initial public offering and lacklustre listing in 2021, amid cascading share prices of a company he co-founded over two decades ago.
One97 Communications Ltd., the parent entity of India’s fintech pioneer, went public at a time when the market was spooked by various factors, and that affected pricing, Sharma told Sequoia Capital’s Managing Director Rajan Anandan at IAMAI’s India Digital Summit 2022 on Wednesday.
This was one of the first public appearances made by Sharma since Paytm’s disastrous market debut in November last year.
“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 said at the event. “This quarter we are talking about $100 million revenue from payments which is like a sizable revenue… People underestimate the size of payments revenue.”
He also claimed Paytm was seeing higher revenues at lower costs.
“People are underestimating the compounding impact that the customer base on this platform has…. We have spent much less than any year ever… Our business has never looked better,” Sharma said.
On Monday, brokerage firm from Rs 1,200 per share to Rs 900 per share. That’s 58% lower compared to Paytm’s issue price of Rs 2,150. Macquarie said Paytm’s payments business accounts for 70% of overall gross revenues and hence any regulations capping charges for digital payments could affect the company.
As on Wednesday, Paytm’s market cap stood at $9.49 billion compared to its peak private market valuation of $16 billion.
Sharma said that the contribution margin for payments continued to be in the double digits for Paytm. Quarterly revenue from payments has hit $140 million, if the merchant services it provides are included, he said. Revenue is expected to grow at least 50%-60% year-on-year, he added.
“Credit is the most monetisable financial service. Bajaj Finance has been there for 30-32 years, Paytm processes more loans than Bajaj today, in less than three years…,” Sharma said. “For our credit business, we should be benchmarked against only one guy and that is Bajaj (Finance). We (Paytm) should be looked at for the scale we deliver in terms of total loans, value of loans and quality of loans.”
“The problem in our country has been with the companies which give loans—banks and NBFCs. The wrong metric they chase is the loan size. The better metric that they should chase is the quality of loans,” he said.
Earlier this week, Paytm said that the number of loans disbursed through its platform rose five times over the year-ago to 4.4 million during the December quarter, as a part of its public disclosures with Indian exchanges.
According to the company, the value of loans disbursed through its platform during the third quarter was Rs 2,180 crore—a 365% increase year-on-year. The average size of a loan provided by Paytm is currently around Rs 5,000.
On Wednesday, Paytm shares fell 3.22% to Rs 1083.40 apiece on the BSE while the benchmark Sensex ended the day 0.88% higher at 61,150.04 points.