Paytm Shares Falls 4.6% As Second Quarter Net Loss Widens: 10 Points

Paytm Shares Falls 4.6% As Second Quarter Net Loss Widens: 10 Points

As of 10.01 am, the Paytm stock was marginally up 0.11 per cent at Rs 1,783.15.

Shares in One 97 Communications Ltd, the parent of Paytm, dived as much as 4.63 per cent in early trade on Monday after the digital payments company’s net loss for its second quarter (Q2) widened due to a rise in expenses. In its first earnings report since going public earlier this month, the company said expenses jumped 37.1 per cent to Rs 1,599 crore and consolidated net loss increased to Rs 474 crore from Rs 437 crore a year ago.

Here’s Your 10-Point Cheatsheet To This Story:

  1. Paytm, which counts China’s Ant Group and Japan’s SoftBank Group among its backers, raised $2.5 billion this month in India’s biggest initial public offering, but made a dismal debut on the stock exchanges.

  2. Analysts have pointed at Paytm’s expensive valuations as the reason behind the fall in stock price on its first trading session. As of 10.01 am, the stock was marginally up 0.11 per cent at Rs 1,783.15.  

  3. The company “faces stiff challenges in its customer acquisition engine, which would slow down its revenue growth in the core payments business,” brokerage JM Financial said in a note to clients.

  4. The company said its gross merchandise value from transactions other than a state-backed peer-to-peer payments network, popularly called UPI, grew 52 per cent in the quarter from a year earlier.

  5. Paytm’s revenue from operations surged 63.6 per cent to Rs 1,086 crore for the quarter ended September.

  6. Paytm competes with Google and Walmart Inc’s PhonePe in India’s digital-payments market, and all of these companies offer peer-to-peer payments on UPI.

  7. Founder and chief executive Vijay Shekhar Sharma has said investors will need time to understand the company’s business.

  8. “Some of the line items in our payment business are not just profit generating but free cash flow generating,” Mr Sharma said. “Our revenues and contribution margins are growing on the back of payment and financial services business where payment itself is the primary driver.”

  9. Its commerce, cloud and financial services businesses had huge potential to make more money for the company, Madhur Deora, Paytm’s group chief financial officer said.

  10. Paytm offers services including merchant payments, insurance and gold sales, movie, flight ticketing and bank deposits.

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