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Making bill payments and paying shops and other individuals are really essential in our day-to-day lives. The handling of cash was the only way to make such payments. However, the rapid expansion of markets, the widening of our daily needs, and the prevailing digital drive have proved the loopholes of cash-based transactions and established online money transactions as promising alternatives. Besides, cash-based transactions have largely grown to be unsafe and lacking transparency. Furthermore, with the onset of the coronavirus pandemic, cash transactions are also deemed quite vulnerable.
Digital transactions have already received a major boost during the demonetization followed by the Covid-19 pandemic along with the large-scale digitalization drives across the country. Paytm is one of the oldest digital payment apps, which has brought about a watershed moment in the history of payments in India. The company encourages payments through mobile with its famous tagline 'Paytm Karo.'
The company was founded in 2010 and is based out of Noida, Uttar Pradesh. Here's presenting the successful journey of Paytm, where you will get to know about the company in detail, Paytm headquarters, Paytm funding rounds, Paytm logo, Paytm bank owner, Paytm future plans, Business and Revenue Model, IPO, Paytm Mission and Vision, Paytm Challenges, Controversies, the answer to the question "in how many countries Paytm is used?", and more.
Paytm - Company Highlights
- Startup Name - Paytm
- Headquarters - Noida, Uttar Pradesh
- Industry - FinTech
- Founders - Vijay Shekhar Sharma
- Founded - 2010
- Total Funding - $3.54 billion
- Revenue - $639.20 million (Rs 4974.2 crore in FY22)
- Valuation - $16 billion (October 2021)
- Parent Organization - One97 Communications
- Website - www.paytm.com
- Tagline - Paytm Karo
Paytm - About
- Paytm is a leading financial service and bill payments app that offers financial solutions to its customers, mobile, DTH recharge facilities, and more through its platform. Paytm e-commerce parent organization is One97 Communications. The Paytm main office/head office is based in Noida, Uttar Pradesh.
- The Paytm company was founded by Vijay Shekhar Sharma in 2010. The platform was initially designed to cater to merchants and customers to help them send and receive money online. The company rapidly grew popular and expanded to include wallet services, e-commerce facilities, and more to make life easier for Indians.
- Paytm Payments Bank is said to be the country’s largest digital bank with more than 58 million account holders. ‘Paytm Money’ is regarded as the biggest investment platform and contributes to Systematic Investment Plans (SIP) in the Mutual Funds Industry. The Paytm Payments Bank has recently been barred by the RBI from opening new accounts for customers, as per the reports dated March 11, 2022. The onboarding of new customers for the Paytm Payments Bank would now require specific permissions to be granted by RBI. This was because of "certain material supervisory concerns", which came up as per the bank's statements. This move is taken to allegedly punish the fintech giant's arm for the violation of the "Storage of Payment System Data" law.
- It has also gained access to launch its services in Stock Broking, and National Pension System (NPS). Furthermore, Paytm First Games and Paytm Insurance have also gathered the usage of millions of people globally. Besides, Paytm also launched a mini app store to support Indian app developers and entrepreneurs.
Paytm - Industry
- The digital payments market saw transactions worth $5.44 trillion in 2020, which is further estimated to be worth around $11.29 trillion by 2026 at a CAGR of 11.21% from 2021 through 2026. After PhonePe and Google Pay, Paytm is the third-largest player in the digital payments market in India.
Paytm - Founders and Team
Vijay Shekhar Sharma
- Vijay Shekhar Sharma is the founder and CEO of Paytm. Sharma is counted among the top digital entrepreneurs in India. He was ranked as India’s youngest billionaire in 2017 by Forbes when his net worth was calculated at $1.3 billion. The Paytm CEO is also a recipient of the highest civilian honour of the Government of Uttar Pradesh, Yash Bharati. He was also featured in Forbes 2020 when Sharma was ranked as the #62nd richest person in India.
- Vijay Shekhar Sharma has been reappointed for the post of Paytm Managing Director (MD) and Chief Executive Officer (CEO) for the next 7 years, which will be effective from December 19, 2022, as announced by the company, and ending on December 18, 2027. Along with him, the company's board has also approved the appointment of Madhur Deora, the CFO of Paytm, as an additional director of the company, which will be effective from December 19, 2022, to December 18, 2027. Deora might also retire by rotation while the Paytm MD and CEO will not be liable to do so.
- Vijay was born in a middle-class family in Aligarh and was naturally good in academics, owing to his father being a school teacher. Though he was a bright student, he was schooled in a Hindi medium school and soon realized his weakness in English during his college admissions. However, Vijay didn't yield to it and confronted and conquered his fears most dauntingly. He was later admitted to the Delhi College of Engineering from where he earned his Btech in Electronics and Communications Engineering.
- The entrepreneurial itch was always inside him. Vijay developed indiasite.net while he was still in college in 1997 to start his entrepreneurial journey. After 2 years, he sold his website for $1 million but only to scale new heights as an entrepreneur. He founded One97 Communications in 2000 to offer mobile news content, ringtones, jokes, cricket scores, and exam results. This company later became the cradle of Paytm, which he started in 2010 with an initial investment of $2 million in Noida.
- Vijay Shekhar Sharma was a prominent billionaire in the Indian startup ecosystem but he significantly lost his wealth since the listing of his company in November 2021, at a pace of $11.55 million (Rs 88 crores) daily. This resulted in the lowering of his net worth to $999 million as quoted by Forbes in one of its articles on March 15, 2022, which was calculated at $2.35 billion before the IPO listing.
- Paytm founder Vijay Shekhar Sharma was arrested on February 22, 2022, after he allegedly rammed a senior police officer's car, and was released on the same day on bail.
- The Paytm Founder was driving a Jaguar Land Rover when it hit the vehicle of DCP (South District) Benita Mary Jaiker outside The "Mother’s International School" on Aurobindo Marg. The incident took place when the DCP's driver had taken the car for refuelling it and no one was inside the vehicle, hence, it was declared that no one was harmed. However, Constable Dipak Kumar, the driver of the DCP driver immediately took down the number of the alleged Land Rover, which was later found out to be of Vijay Shekhar Sharma.
- Vijay Shekhar Sharma was also inclined to literature since his early school days. A Vijay Shekhar Sharma poem went viral when the Paytm boss shared one of his poems that he had written back in 1991, when he was in Class 10 then, published in his school magazine. The motivating poem instantly went viral after Vijay shared it through his Twitter handle on August 6, 2022, and has picked up over 3412 likes, as of August 10, 2022.
- The team of Paytm is currently 10,001+ strong, as per its Linkedin profile. Paytm assigns Nakul Jain the role of the CEO of Paytm Payments Services Ltd, as of July 22, 2022. Praveen Sharma who has acted as the CEO of PPSL will now be leading the commercial vertical of the company along with sharing some other responsibilities. Jain's Linkedin profile reveals that he has been working as the MD and CEO of PPSL since April 2022. Paytm Payments Services Ltd. is a Paytm wing that primarily helps the company handle the payment gateway and payment aggregator segments.
Paytm - Vision and Mission
- Paytm’s goal is to enhance digital excellence, increase earning growth, and cross-selling opportunities. The company also wants to leverage its capabilities and value propositions to increase its market position. Furthermore, Paytm wants to bring half a billion Indians into the mainstream economy through its financial services.
Paytm - Name, Tagline, and Logo
- Paytm payments bank logo is designed in two shades of blue - navy blue and sky blue, which is the brand colour, where the brand name is written as "Paytm". Paytm has a simple but memorable logo that contributes to its brand recognition.
- Paytm denotes ‘Pay through Mobile’, representing the digital transactional services of the company. The company's vision tagline is ‘Paytm Karo’.
- The company is on a mission to bring half a billion Indians into the mainstream economy through payments, commerce, banking, investments, and financial services.
- The Story of Vijay Shekhar Sharma: From Hindi Medium to Building a Silicon Valley!
- The Indian startup circuit has witnessed many astounding stories. The growth ofmany multinational companies has added to its worth and value as an ecosystemwhere everyone gets an opportunity to shine and rise. With the new eraapproaching, it is time to have a sneak-peek into one of the most succe…
Paytm - Growth and Revenue
- Founded in August 2010, billed as India's most loved payments app, Paytm has witnessed remarkable growth, and regularly features among the top 3 UPI apps in India. More than 2 crore merchants in India use the Paytm platform to accept payments directly to their bank accounts. The Paytm company is already listed and is expected to achieve profitability by 2023. Paytm Chief Sharma mentioned the same to the shareholders of Paytm much like he had reiterated it on a couple more occasions earlier, as of July 29, 2022. Sharma highlighted that the Paytm team has contributed immensely to improving Paytm revenues and enhancing profits. All of these encourage more investments to be made in the payments and credit businesses of Paytm, which will further help the company to reduce the EBITDA losses.
- Paytm, which was founded by Vijay Shekhar Sharma with an initial investment of $2 million in August 2010, has grown huge and spread widely. It has been estimated to be valued at more than $6.3 bn in 2020, thereby making it one of the top 10 most valued brands in India. Though Paytm first started as a prepaid mobile and DTH recharge platform, the company later added postpaid mobile, data card and landline bill payments in 2013. It then launched the Paytm wallet in January 2014, which Uber and the Indian railways eventually chose for their benefit, after which Paytm started with eCommerce, bus, and online ticketing services. Education fees, electricity, water, gas payments, and other utility services of Paytm started in 2015. The year 2016 saw Paytm getting on with movie events, amusement park ticketing, Paytm QR and flight ticket bookings, rail bookings, and gift cards.
- Paytm's valuation rose to an estimated $10 bn in May 2017, with the largest round of stake by a single investor, Softbank. Paytm crossed 10 crore app downloads in 2017. It launched Paytm Gold in the same year, which is still a big player in the e-gold segment of India. It eventually launched numerous other services like the Paytm for Business app, Paytm Gold savings plan, Paytm First Games, Paytm Money, and more to cater to the varied requirements of its customers.
- Paytm Payments Bank has got approval from the RBI to operate as a scheduled bank, as per the official statement from the company. It has been included in the Second Schedule of the Reserve Bank of India Act, 1934. This will help the bank participate in Request for Proposals (RFP) issued by the government and large corporations, take part in the primary auctions, fixed-rate and variable-rate repos, and reverse repos, along with participation in Marginal Standing Facility. Furthermore, Paytm Payments Bank would also be eligible to partner in government-run financial inclusion schemes now. The RBI Act 1934 states that a bank can be included in the second schedule if it can convince the RBI that its affairs are not harmful to the interests of its depositors, which Paytm did.
- Paytm has been recording robust growth in its lending business, where the number of loans disbursed has gone up 471% year-on-year for the 2 months ending in May 2022. The disbursal of Paytm loans in Q2 2022 has gone up by 30% from the 6.5 mn loans it disbursed in the quarter ending on March 31, 2022. Besides, there was also an increase in the value of loans disbursed, which rose by 56% QoQ, from Rs 3,553 crore in Q1 2022, to Rs 5,554 crore in Q2 2022. Along with these, Paytm has also witnessed growth in its lending business, total merchant payments, monthly transacting users, and more.
- The company raised the number of users transacting on the platform by 48% from 50 mn, which was recorded during the same period in the early fiscal to 74 mn during the 2 months ending in May 2022. Paytm thus, raised its monthly transacting users from 71 mn in Q1 2022 to 75 mn in Q2 2022.
- The company also boasts of adding 2 mn offline devices in a year. It earlier had 0.9 mn devices in May 2021, which rose by 277% to become 3.4 mn during the period ending in May 2022.
Rise and Fall of Paytm Shares
- Shares of One97 Communications have hit a 3-month-high of Rs 739. This happened on July 14, 2022, when the stocks surged by 4% on the BSE. This was the highest level that the Paytm stocks reached since March 11, 2022. The Paytm shares continued with their winning streak and were reported to have ended 3.2% higher, at Rs 731.30, on July 18, 2022. The shares of the company were going up as soon as the company reported a 492% YoY growth in the total loan disbursements during the quarter that ended in June 2022. The Paytm shares, which saw a record low of Rs 511 on May 15th, 2022, have rallied 36% and recovered by 44%, as per recent reports.
- Paytm released its June quarter earnings on August 5, 2022, and this is how it phoenixed back in the Indian stock markets. The shares of Paytm touched Rs 834.10 at noon on the same day, which was the highest level they have traded to since February 18, 2022. The Paytm shares traded at Rs 828.75, which was a 5.67% rise since its previous close, on the NSE.
Paytm Launched Paytm Mall
- Paytm launched Paytm Mall in February 2017. Paytm Mall was an initiative by Paytm to foray into the eCommerce industry. This initiative was also a fantastic step to support the Paytm wallet. The Paytm Mall, which was set up initially with a $200 mn capital infusion from Alibaba, was supported throughout by the Chinese giant and Ant Financial. However, on the new decision of Paytm Mall to pivot to the Open Network for Digital Commerce (ONDC), which will mark a departure from the traditional physical goods e-commerce, the Vijay Shekhar Sharma-led company's Paytm Mall lost 99.5% of its valuation. Besides, Paytm Mall also mentioned that its key investors - Ant Financial and Alibaba have already exited the company.
- The company will be holding an EGM soon, as per the reports dated May 17, 2022. According to a Paytm Mall sent notice, the company is expected to let the shareholders vote to pass a resolution in order to reduce the share capital of the business. The share capital of 21.27 lakh shares, will be eventually brought down to 12.06 lakh shares of Rs 10 each. This will involve cancelling and extinguishing the shares held by Ant Financial and Alibaba. The Paytm Mall, which was valued at $3 bn, declined to become 13 mn, with the exit of Alibaba and Ant Financial.
- ONDC is a growing network and has huge growth potential, and this is the reason that it is being suggested as a solution to break the dominance of Walmart-owned Flipkart and Amazon India. Even biggies like Flipkart, Reliance Retail, and Amazon would be joining the ONDC network. In the ONDC network, the customers can freely access any sellers on the network with the help of any app that is aligned with the service. Thus, this practice will challenge monopolistic practices in India's eCommerce sector and will also help reduce the dependency on eCommerce firms.
Paytm Launched its Mini App Store
- The digital payments company Paytm launched a mini app store on October 5, 2020, in order to support Indian app developers and entrepreneurs. This made Paytm a direct competitor to the Google Play Store. Paytm has come up with the Mini app store, following the temporary ban it faced from the Google Play store on 18th September, for violating the developer guidelines on real money gaming.
- Phonepe, which is Paytm's rival, launched its own in-app platform in June 2018, which was later rebranded as PhonePe Switch in October 2019. Instead of giving local apps and developers, Paytm is hosting links to Progressive Web Pages (PWAs), which are light apps that can run within a web browser without requiring any installation.
- More than 300 apps, including Decathlon, Ola, Rapido, Netmeds, 1MG, Domino’s Pizza, FreshMenu, and NoBroker joined right at the time of the release of the Paytm app store, the count of which increased each day. The startup founders such as Paytm’s Vijay Shekhar Sharma and Razorpay’s Harshil Mathur, along with 50 other founders discussed the possibility of building an Indian app store to challenge Google.
- Paytm said that the Mini app store was in its beta testing phase with select users in the country for some time and had then seen over 12 Million visits in September 2020.
- To access the Mini App Store, open your Paytm app. On the home page, click on Show More > Mini App Store from the pop-up menu. The portal allows direct access to users to explore, use, and make payments through the apps, without any additional downloads or installs.
- When Google had accounted that it would enforce its 30% fee for apps, the Indian app developers and entrepreneurs demanded a national app store alternative to Google Play. Google Play Store then pushed back the 30% commission in India until March 31, 2022. The tech giant said that the delay has been so the Indian developers have enough time to implement the UPI for the subscription option that will be made available on Google Play. The search engine behemoth has further revealed that it would slash the commission fee from 30% to 15% and extend the deadline further to October 2022, which will give enough time for Indian app developers to realise things.
Paytm Brings Contactless In-Store Ordering
- Indian e-commerce giant Paytm came up with this new idea of having a 'contactless in-store ordering'. It said that the idea of Paytm contactless ordering will help in promoting the process of minimum physical contact.
Paytm Contactless Ordering
- Paytm in a statement said that they have developed an online menu system where a QR code will be given to the restaurants, and the users can scan the QR code to get the menu on their mobile phones, and can place their orders without having contact.
- This process of contactless ordering and dining will help people avoid the unnecessary need of touching the menu that could possibly be unsanitised and there will also be a certain distance maintained between the customers and the waiters.
- Paytm already introduced the process of contactless payment or billings a few years ago, making a greater hold in the market soon after the demonetization phase.
- As the lockdown has been lifted, Paytm is mainly aiming for the top 30 cities to start with over one lakh restaurants that will work this way. This concept can be a great success as it is helping the restaurants restore their business, which had been closed for a while.
- This concept of contactless ordering and dining has been brought to stop the spread of coronavirus infection after the reopening of the country. Restaurants have also been told to properly sanitise and create a particular distance between the customers and the owners.
Statement by Paytm on Contactless Ordering
- Paytm said that its solution will support all of its payment methods, which include Paytm wallet, Paytm UPI, net banking, and cards, and the orders will be updated from time to time as the restaurant changes them.
- "In the first phase, the company is in the process of onboarding over a lakh restaurants, which will help them to ensure social distancing amidst covid-19 fears. This, in turn, will also enhance the restaurant's efficiency and trust for the customers to recover their business while reducing cost overheads," Paytm spokesperson said in a statement.
- Paytm also added that it will extend this unique solution to many big franchisees and dine-in restaurants so that it could reach out to maximum people.
- Paytm Vice-President Nikhil Saigal in a statement said, "We understand that after the lockdown, our country will require a safe dining and food ordering experience. Therefore, we have built this technology to help restaurants and their customers follow, social-distancing norms. With our 'contactless in-store ordering', they will avoid touching menu cards and cash for a safer experience".
- Paytm has pioneered the emergence of a revolutionary industry for the Indian market. When it brought in the method of online payment services it created a great impact on the market. When it brought in the concept of online payments, it was not a big hit but the promotion of this concept at the right time, which was just after demonetization, helped them to have a good hold in the Indian market.
- Bringing in this new concept of contactless in-store ordering can help them create a good impact in the market once again. At this time of crisis, people are looking at the ways, which can help promote the concept of social distancing with no human contact as it has become a necessity now. Launching this concept can become a major hit among the people, and will also help in promoting this concept.
Covid-19 Vaccines and Paytm
- Paytm had made it possible for the users to find their COVID-19 vaccine slots and book them right from the Paytm app during the growing pandemic. The campaign was titled #GetShotGo.
- The total income of Paytm, which was recorded at Rs 3,540.8 crore in FY20, has dropped to Rs 3,186.8 crore in FY21. This sudden drop in the income of the Fintech giant can be traced to the reduced commercial activities as a result of the pandemic-induced lockdowns.
- Paytm saw a 63.6% rise in its revenues during the July-September quarter of FY22, which are recorded at Rs 1,086.4 crore. The operational revenues were reported to be around Rs 663.9 crore during the same period in the last fiscal. This jump in revenue has been mainly attributed to the non-UPI payment volumes (GMV), which saw a 52% growth, and to the financial services and other revenues, which increased by more than 3X. The Fintech unicorn has witnessed a 50% growth in its total income, which is reported at Rs 1,134.5 crore during the period mentioned above, which was at Rs 758.1 crore, in Q2FY21.
- Paytm's revenue from operations stood at Rs 1456 crore in Q3 FY22, which took the total income of the company to Rs 1,533.4 crore. This denoted a 34% rise in its revenues from Rs 1,086 crore, which it earned during the July-September quarter of FY22. The Vijay Shekhar Sharma-led company's revenues ballooned by 88.6% from Rs 772 crore, which was recorded during the same quarter in FY21.
- Paytm unveiled its Q4 FY22 results, and in the end, it has noted that the Paytm parent, One97 Communications, has registered a 41% increase in its net loss, which became Rs 2396.4 cr in FY22. However, the revenue from operations of the company improved by 77% to become Rs 4974.2 cr. Though the EBITDA of Paytm still remained negative for the present quarter, it improved from Rs 420 cr to Rs 368 cr. The Vijay Shekhar Sharma-led company is currently aiming to break even at the EBITDA level.
- Paytm had filled its DHRP where the company announced that it would be raising an amount of Rs 18,300 crores through IPO. The company further aims to make a new subsidiary out of the payments aggregator business that it manages. This new Paytm subsidiary will reportedly be called Paytm Payments Services Limited. The deadline to adhere to the RBI's payment aggregator rules is closing in on Paytm, which is looking to hold an extraordinary general meeting to announce the establishment of its new subsidiary, which is currently pending approval from its shareholders.
- Paytm released its financial results for the quarter ending September 2022 (Q2 FY 2023). It recorded a revenue of Rs 1,914 crore, representing 76% YoY growth and has also seen a great improvement of 61% YoY in EBITDA before ESOP costs by Rs 259 crore. It also reduced its net loss by 11% QoQ in Q2 FY23.
- The startup's average monthly transacting users grew to 79.7 million, and its merchant base grew to 29.5 million. It also saw growth in device deployment, with 1.1 million devices added, bringing the total number to 4.8 million. Paytm also disbursed 9.2 million loans worth Rs 7,313 crore in Q2 FY2023.
- Most of Paytm’s revenue for the quarter came from its payment services to merchants: Rs 624 crore, followed by revenue from payment services to consumers (Rs 549 crore), financial services and others (Rs 349 crore), and commerce and cloud services to merchants (Rs 377 crore).
Paytm - Funding and Investors
- The company has amassed funding of around $3.54 billion over more than 15 rounds. Paytm received $1 bn from T Rowe Price, which was the last funding round that the company saw coming in November 2019. The $300 mn funding round led by Berkshire Hathaway was another crucial funding round that the Vijay Shekhar-led company witnessed. This Hathaway-led round was also hailed as the American conglomerate's first investment in any Indian company. However, this round was not led by the billionaire businessman Warren Buffet but by Todd Combs, in which the company picked up a 3-4% stake in the Paytm parent One97 Communications. Berkshire had tried its hand in India in 2011 with Bajaj Allianz General but exited two years later due to the lack of profitability.
- Paytm had its latest Series G round of funding from the investor "T Rowe Price" in November 2019. This led the total valuation of the company to rise to $16 Billion.
- The Paytm founder and CEO Vijay Shekhar Sharma bought 1.72 lakh shares of the Paytm parent, One97 Communications Ltd, which is worth around Rs 11 crore on May 30-31, 2022. Sharma bought the fintech unicorn parent's shares in 2 tranches - where he bought 1,00,552 shares and 71,469 shares for Rs 6.31 crore and Rs 4.68 crore in 2 successive days. These back-to-back transactions make Sharma the holder of 5.76 crore shares of the company. However, it is also important to note here that the regulations prevented him to buy shares for at least 6 months after the Paytm IPO, which was completed in November 2021 because he was a selling shareholder at the IPO.
- There were some other senior executives of Paytm, who also, like Vijay Shekhar Sharma, bought the company's shares in May itself. Atul Shridhar, VP of Engineering at Paytm, bought 24,020 shares for Rs 1.33 crore. Nilesh Kumar Singh, who is the VP of Human Resources at Paytm, bought 11,602 shares for Rs 64.25 lakh. Also, Praveen Kumar Sharma, who is serving as the MD & CEO of Paytm Payments Bank, bought 9,787 shares for Rs 54.20 lakh.
- Antfin (Netherlands) Holding B.V was the largest shareholder of Paytm before the company went ahead with its IPO. The cap table also had SVF India Holdings, SAIF III Mauritius Company Limited, Vijay Shekhar Sharma, Alibaba, SAIF Partners and others. The current shareholding pattern is yet to be disclosed by the company.
Paytm - Investments
- Paytm has invested in numerous companies to date. The Indian fintech unicorn has further revealed on May 21, 2022, that it would be investing a total of Rs 950 crore in Paytm General Insurance Limited (PGIL) in multiple tranches over the next 10 years.
Paytm – IPO
- Aiming for what was estimated to be the biggest IPO issue after Coal India, Paytm roped in sovereign wealth funds to stand as its anchor investors in the Pre-IPO placement of Paytm, as per the reports dated October 8, 2021. Abu Dhabi Investment Authority (AIDA), Government of Singapore Investment Corporation (GIC), and Canada Pension Plan Investment Board (CPPIB) are some of the prominent investors who were in talks with Paytm for the same. Furthermore, the list also includes the US-based BlackRock and the Japanese financial holding company, Nomura.
- Vijay Shekhar Sharma-led Paytm has successfully received approval from SEBI, which was pending from July 2021, when it filed its DRHP with the market regulator to raise Rs 16,600 crores.
- The all-awaited mega Paytm IPO round of INR 18, 300 crores, had opened on November 8, 2021, at a price band of INR 2,080-INR 2,150. According to the reports, the retail investors of the company have subscribed to 36% or 0.36 times of their earmarked shares right in the first hour of the offer. The retail individual investors and non-institutional investors were the ones that pitched in during the first hour. The company had been successful in raising funds that amounted to a record $1.1 bn, from its anchor investors on November 3, 2021, which was also dubbed as India's largest anchor round, prior to the IPO round. The anchor round of Paytm has been oversubscribed 10 times by 74 investors, that includes:
- Out of Paytm's 74 investors, 21 of them had bids greater than Rs 100 crores, as per the reports on November 3, 2021.
- Paytm will end its IPO round today, November 10, 2021, where the company received subscriptions close to 48% on Day 2 and is expected to close its IPO with a subscription of over 56% on Day 3. However, the company has not yet witnessed significant demand from institutional and non-institutional investors.
- Though Paytm witnessed a decent IPO round, the company's shares started to plummet as soon as the stocks were opened for trading on NSE. The Paytm shares opened at Rs 1,950, which was a 9.3% decline from its issue price of Rs 2,150. The company saw extended losses throughout the day today and reached a record low of 28% at Rs 1,560, as per the reports of November 18, 2021. The second day of trading saw a further decline in its share prices, which are currently trading below the Rs 1,300 mark and have hit an all-time low of INR 1,283 per share.
- Paytm finally saw a rise in its share prices by 9% after 2 trading days of decline, where the share prices had nearly fallen by 37%. The market capitalization of Paytm also increased to INR 96,398.29 crore. The second day of the rise of Paytm parent's share prices on November 24, 2021, has seen a recovery of 29% with the market capitalization of the company, which again crossed the 1 lakh crore mark.
- Paytm parent, One97 Communications' shares fell by 12% on March 12, 2022, hitting a new all-time low of Rs 672 per share. This latest dip in shares was due to the recent ban by RBI on Paytm Payments Bank from onboarding new customers.
Paytm - Business and Revenue Model
- The business model of Paytm includes a marketplace and payments bank business model. The revenue sources for the company are divided into several categories such as Marketplace (Paytm Mall), Recharge Services, Bill Payments, Payment Solutions, Paytm Wallet, Paytm Bank, and Digital Gold for digital gold investment.
- Revenue from Marketplace includes fees and commissions from sellers in different categories. Paytm charges commissions from mobile operators for revenue through recharge services. Paytm Wallet is used for almost every digital transaction. The more we use its Wallet, the more Paytm earns from it.
- Paytm launched "Wealth Basket," which is designed to work like a wealth and advisory marketplace on the Paytm Money platform, a subsidiary wholly owned by Paytm. Wealth Basket is designed to offer curated advisory products and services for retail investors.
- Through this new launch of wealth advisory services, Paytm aims to be the new super app for users to invest and grow their wealth wisely. To materialize this plan Paytm has already partnered WealthDesk, an investment tech startup. However, experts believe that Paytm is entering into a market that already seems quite saturated, having 400+ investment tech startups. The same market is also expected to reach a valuation of $14.5 Bn by 2025 surging at a CAGR of 22.4%, as per the reports dated September 9, 2021.
- Swiss RE is looking to join the board of Paytm's insurance business. The Switzerland-based reinsurance and insurance giant is further eyeing to acquire 20-25% stakes in the venture, starting with a capital commitment of around $100 mn, as of the reports dated October 5, 2021.
- This association will aim to formalize the insurance business of Paytm. The Indian digital payments app and merchant aggregator platform lack expertise in insurance, which Swiss RE will readily provide, thereby making the deal worth it!
Paytm - Challenges and Controversies
- Paytm has faced numerous challenges to date. Here's to sum up some of the prominent Paytm challenges and controversies:
Paytm Goes Down, Paytm App Outage
- Paytm reportedly went down for the users on August 5, 2022, who reported that they were not able to log in to the Paytm app and website, and couldn't even make their payments. Delhi, Ahmedabad, Mumbai, Bengaluru, and Chennai are among some of the Indian cities that faced issues with Paytm.
- Paytm soon clarified that it was a network issue across Paytm on Twitter before it worked on it to fix it.
Paytm Employees Burn PhonePe QR Codes
- 3 of the Paytm employees have allegedly mass burnt PhonePe QR codes, as per reports dated August 1, 2022. PhonePe has already filed a police complaint in Surajpur Lakhanwali police station for this incident that took place in Greater Noida. The Paytm employees who were involved in the burning incident of a pile of PhonePe QR codes included Paytm Area Sales Manager (ASM) and a former PhonePe employee.
- A Paytm spokesperson has mentioned this incident and stated that Paytm doesn't tolerate any kind of misconduct, also revealing that these Paytm employees have already been identified and suspended by the Vijay Shekhar Sharma-led company.
Paytm Mall Data Breach Controversy
- Paytm's ecommerce arm, Paytm Mall had allegedly been a victim of a major data breach on August 30, 2020, as per the reports of Firefox Monitor, which had affected nearly 3.4 mn customers' data. This breach, which had allegedly compromised users' data, including their dates of birth, email addresses, and phone number, has been refuted by Paytm though, which mentioned that all of the Paytm users' data is safe, as per reports dated July 28, 2022.
- Paytm has operated with an efficient team that has progressed with the growth of the company. However, not all of them have remained with the company. Yes, the company, much like the others, has seen quite a number of employees quitting the firm. Amit Nayyar, who served as a President for 20 months left the organization on July 9, 2020. According to sources close to Nayyar, he has put down his papers due to personal reasons. Then came the resignation of Paytm CHRO Rohit Thakur on July 10, 2021, as a top-level resignation of Paytm.
- The Chief Operating Officer (COO) of Paytm Payments Bank Abhishek Arun has spent 5+ years at Paytm and then announced his exit via a Linkedin post, on December 23, 2021. Arun was previously the Senior Vice-President at RBL Bank. Renu Satti, COO, offline payments of Paytm had also submitted her resignation to the management of Paytm. Though Satti's resignation was doubted and there was a significant probability that she might be retained, it didn't happen. Satti, who had worked with Paytm for more than 15 years, donning numerous leadership hats including the designation of the CEO of Paytm Payments Bank resigned on December 23, 2021. Satti had officially taken an exit from the company and it is Bhavesh Gupta, CEO of Paytm Lending, who is taking charge of offline payments along with his usual responsibilities since December 24, 2021. Satti will take a career break, as confirmed in the latest company filing.
- Abhishek Gupta, who joined the company in 2020 as the Senior Vice-President and COO-lending also resigned during the same time, after being on his notice on December 23, 2021.
Paytm app Removed from Play Store
- The Paytm app was removed from Google Play Store on September 18, 2020, almost suddenly because it allegedly violated policies related to unregulated gambling apps. According to CNBC - TV18, Google had notified the developers by releasing a statement on September 18th regarding this issue. Google said, “we don’t allow online unregulated gambling apps that facilitate sports betting.” Google also mentioned that the app leads consumers to an external website that allows them to participate in paid tournaments to win real money/cash prizes. This removal didn't apply to the people who have the Paytm app installed on their phones but debarred the new users from downloading the app afresh.
- The whole thing started after the Enforcement Directorate discovered an online betting scam that involved Chinese nationals who have used online wallets such as Paytm, Cashfree and Razorpay. It raided over 15 locations including Delhi, Gurugram, Mumbai and Pune, and has frozen Rs 46.96 crore in 4 bank accounts after finding that the companies were running illegal online betting apps linked to China. During the search of ED in 2019, the accounts of Dokypay Technology Pvt Ltd were mostly found in the HSBC bank.
- This also came as a huge blow for Paytm, as it was also planning to launch Paytm First Games on the 19th of September in the same year. Paytm First Games was designed as the Indian Digital payments leader’s platform for the fantasy game segment and had also made Sachin Tendulkar its brand ambassador. The app aimed to get over 100 million users during the upcoming Indian Premier League and had planned over 200 live events on the platform over the time range of six months.
- Vijay Shekhar Sharma tweeted that the Paytm app is back live on the Play Store with the support of the people and stated that CashBack and Scratchcards are not gambling. The ban that was put into effect earlier by Google Playstore on the app on the grounds of violating the company's rules around gambling was lifted later on.
#BoycottChineseProduct Made Paytm Change its Shareholding Pattern
- Paytm changed its shareholding pattern in Wikipedia after the last India-China border face-off, post which the government banned most Chinese products in 2020. This gave birth to the "Make in India" slogans and also gave rise to numerous hostile reactions against China, its products, and its companies. However, Chinese companies have always been huge investors for many Indian companies with Paytm being one of the major fintech companies in India that are backed by Chinese investors.
- In March 2015, Alibaba took 40% stock in Paytm as a Part of the strategic agreement. As the pressure built up, Paytm changed the shareholding pattern in Wikipedia on June 18, 2020, by replacing "Alibaba" with "ANT Financials". ANT Financials is formerly known as Alipay, which is an affiliate group of Alibaba. This made the Twitteratis claim that Paytm did that to sound non-Chinese.
Paytm Shareholding Change
- Twitteratis asking people to stop using Paytm, as they have more shares from the Chinese. Some of them put screenshots of uninstalling the Paytm app. Instead, they are asking to use BHIM and Other Indian UPI apps as an alternative to Paytm.
User comments on Paytm Shareholding
- A group of users posted memes on this Paytm shareholding pattern as well.
Paytm Memes on Shareholding
- At the same time certain groups of people still showing support for Paytm as it is an Indian Company. According to them, there are other eCommerce giants in India who have large numbers of Chinese investments. They have stakes on Flipkart, Ola, Oyo, Swiggy, Snapdeal, Zomato, and the list goes on. Hence, What are you gonna do with them as well?
Tweet in Support of Paytm
- Chinese Funded Startups might find it difficult for capital investments
- Due to ongoing standoff between two countries Chinese backed startup may face some hurdles in their capital investments.
Sharing Information with Chinese Companies
- Marred by the recurrent fall of its share prices, Paytm is still limping. Along with that, Paytm is also surrounded by challenges and controversies ever since it went for IPO. According to a recent report by Bloomberg, Paytm has been accused of sharing information with the Chinese entities that hold a share in the company indirectly via its Paytm Payments Bank. However, this report has been announced by Paytm on Twitter to be "false and sensationalist". The Paytm Payments Bank was recently rejected by RBI to onboard new customers in March 2022. This has been allegedly done by the governing body of the banks to punish the banking arm of the fintech company for violating the ‘Storage of Payment System Data’ law.
Paytm Founder Vijay Shekhar Sharma's Arrest
- The reports of the arrest of the Paytm chief Vijay Shekhar Sharma have also been surfacing lately. The Founder and CEO of Paytm had been allegedly arrested and bailed on the same day February 22, 2022, for ramming the vehicle of DCP Benita Mary Jaiker. The Jaguar Land Rover of Sharma had allegedly rammed the DCP's car, which was out for refuelling in a "minor motor accident", as per Paytm's reports.
Paytm - Value Proposition
- The recharging business of Paytm is one of its most prominent propositions, which was the initial service proposition of the company. The company then went on to diversify its services by further producing newer services with the help of its Paytm Wallet, E-commerce vertical, the introduction of Digital Gold, and more.
Paytm creates value for the merchants:
- Paytm creates value for companies by offering them an array of digital payment methods, both in stores and online. Furthermore, it also considers the other traditional methods like debit and credit cards, including the new-age innovations like QR codes, email links, text messages, and the digital wallet service from Paytm as well as its competitor services such as United Payments Interface (UPI).
- The Paytm business also supplies the hardware that is required for physical in-store purchases. Besides, the payment services of Paytm are also integrated with its Smart Retail platform, a solutions-based business model that is built to offer additional value for the retailers that helps them manage and optimize payments and other important features like the analytics, inventory, and customer engagement under one system.
Paytm creates value for individuals:
- In comparison to the countries of the West, the Indian people were not quite used to card payment. Transactions in India (around 95% of it), mostly relied on cash payments, as per the reports published in 2016. This is why Paytm was readily appreciated by the users who wanted to go cashless or digital, without going through all the hassles of creating a bank account.
Paytm - Partnerships
- December 3, 2021 - Paytm partnered with PMS Bazaar with a view to help manage the portfolio of HNIs, who have a minimum investment folio of Rs 50 lakhs.
- September 27, 2021 - Paytm brings real-time international remittances into the Paytm mobile wallet by partnering with Ria Money Transfer.
- August 23, 2021 - Paytm collaborates with HDFC bank to provide solutions across payment gateway, POS machines, and other credit products.
- July 19, 2021 - Paytm partnered with IndusInd Bank to enable payments from the fixed deposit accounts held by the users of the latter.
- April 19, 2021 - Paytm saw a partnership with the Life Insurance Corporation of India to help facilitate digital payments.
- February 26, 2021 - Paytm and Ola partnered with IndusInd Bank and applied to RBI for the NUE license.
- June 22, 2020 - Paytm partnered with Tata Starbucks on June 22, 2020, which is a pan-India partnership for a contactless dining solution.
- August 23, 2019 - BCCI partners with Paytm and awarded the company its title sponsorship rights for BCCI International and Domestic seasons between 2019 and 2023. However, Paytm had asked to pull out of the deal, and Mastercard will replace Paytm, as per the reports dated July 26, 2022. The payments giant Mastercard will be signed as the title sponsor for all the international and domestic cricket matches organised by the BCCI in August 2022.
- October 22, 2018 - Paytm has collaborated with Softbank Group and Yahoo Japan to launch its e-wallet service in Japan called PayPay.
- Paytm was the associate sponsor of the Sony TV network, which was awarded the telecast rights of IPL
- Paytm was also announced as the official partner of Mumbai Indians.
Paytm - Acquisitions
- Paytm acquired 100% stakes in CreditMate, a Mumbai-based digital lending startup on October 3, 2021. Founded by Jonathan Bill, Ashish Doshi, Aditya Singh, and Swati Lad in 2019, CreditMate was developed as a collections platform to help lenders collect their overdue from borrowers. Paytm has added one more company to its list of acquisitions, which is currently 12 companies strong.
Paytm - ESOPs
- Paytm announced that it has allotted around 10,11,582 equity shares worth Rs 189 crores to 166 of its former employees and current employees who had successfully submitted their applications to exercise the options vested to them under ESOP Scheme 2008 and ESOP Scheme 2009.
- Paytm has declared that the last date of converting the ESOPs to shares for their employees (Key Management Personnel) is September 22, 2021 and that for the "Designated Persons" is September 27, 2021. The country's leading merchant aggregators and digital payments platform have recently increased their ESOP pool to 61 mn, which was 24 mn earlier, and more than 200 employees have already got their ESOPs converted to shares.
- Furthermore, it has also been reported that the Paytm Founder and CEO, Vijay Shekhar Sharma is also drawing a considerable amount of new stock options in One97 Communications and this will increase his stakes in the parent company by 2-3%. However, the fact that whether Sharma will convert the ESOPs into shares and monetize them, still remains undecided. Sharma currently holds around 15% of the stakes in One97 Communications, as of September 24, 2021, and is planning to sell a part of his holding.
- Paytm's parent, One97 Communications has granted new stock options to its employees under its existing ESOP scheme, as per the reports dated May 9, 2022. This time, it has allocated 39,70,721 (3.9 mn) stock options under the One97 Employees Stock Option Scheme 2019 to the employees who are eligible, at an exercise price of Rs 9 each. However, the number of employees who will be benefitted from this grant is yet undecided.
Paytm - Competitors
The top competitors of Paytm are:
- Ant Financial
Paytm proves to be the best in its field with its advanced technologies and strategic business models.
Paytm - Future Plans
- The three main focus areas of the company are financial services, e-commerce, and payments. Paytm plans to invest Rs 10,000 Crore ($1.4 B) over the next three years. The investment will mainly focus on expanding its financial services. Paytm aimed to reach 100 million users in the T20 league and is planning to invest Rs 300 Crore in branding and marketing. Vijay Shekhar Sharma, the Paytm founder disclosed that Paytm will likely be profitable by September 2023.
Who is the current owner of Paytm?
- Paytm is owned by the Indian company One97 Communications Ltd.
Is Paytm a Chinese company?
- Paytm is an Indian company, but one of its major investors is Ant Financial, which is a major Chinese investor.
Why was Paytm banned?
- Paytm was banned from the Play Store for allegedly violating its gambling policies.
Is Paytm for business free?
- Yes, there are no charges for setting up your Paytm for Business account.
What is the Paytm CEO name?
- The name of the Paytm CEO is Vijay Shekhar Sharma, who has been the founder and CEO of the company since it was founded back in 2010.
How many employees work in Paytm?
- There are more than 10,000 employees in Paytm.
Is Paytm an Indian Company?
- Paytm is an Indian fintech company that specializes in digital payments and ecommerce and comes with the facility of digital wallets.
Paytm operates in how many countries?
- Paytm currently operates in India, where the Paytm payments bank was founded, and in two other countries namely Canada and Japan, as of now.
Which country made or developed the Paytm app?
- Paytm is developed in India, and the development of Paytm and its processes happens internally. Therefore, even the Paytm app and numerous other things associated with the brand and its functioning are developed internally by the brand itself.
Is Paytm profitable?
- Paytm has made considerable losses over the years. The company lost Rs 778.5 cr in Q3 FY22, which is a 64% increase from Rs 473.5, which it lost during the 2nd quarter of the same fiscal.
What are the countries where Paytm is available?
- Though Paytm is an Indian company, it supports international payments from over 200 countries with the help of all major international cards even without any additional API integration.