Amid Its Tumbled IPO, Paytm’s GMV in October Grows Over Two Fold Thanks To Festival Spend

At a time when questions have been raised over its profitability, leadership and valuations, recently listed fintech major Paytm has said that it recorded a 131% rise in its gross merchandise value (GMV) in October, at around INR 83,200 Cr ($11.2 Bn).

During the same period last year, the company’s GMV stood at INR 36,000 Cr.

“The growth momentum in GMV continued in October 2021 was driven by festive season spends, as well as an increase in: number of merchants and consumers, adoption of new products, transactions for both online and in-store merchants, and in deployed devices,” the NCR based digital payments major said this.  

In a regulatory filing on Sunday, One97 Communications said that its monthly transacting users (MTU) have consistently grown in FY 2021 and in the first two quarters of FY 2022. The trajectory continued in October 2021 with 6.3 Cr MTUs, growth of 35% year-on-year over the 4.7 Cr MTUs in October 2020.

It further said that it continued to witness strong adoption of its devices business among merchants. The total number of devices deployed across its merchant base has increased from INR 9 Lakh as on June 30, 2021 to approximately INR 13 Lakh as on September 30, 2021 to around INR 14 Lakh as on October 31, 2021.

On the lending business, the filing said that the segment continued to show very strong growth as a result of rapid scale up of all of our lending products, including Postpaid, consumer loans and merchant loans. 

“Our financial institution partners disbursed a total of 1.3 million (13 Lakh) loans in October 2021 aggregating to a total disbursal of INR 6,270 million ($84 Mn), implying a 472% increase in numbers of loans disbursed year-on-year and 418% increase in value of loans disbursed year-on-year,” it said.

The filing comes at a time when Paytm has witnessed a weaker than expected listing and has faced criticism from several quarters for overvaluation of the IPO and lagging profitability.

In a report just ahead of the mega listing, Macquarie Research had said, “Paytm’s valuation, at 26x FY23E Price to Sales (P/S), is expensive, especially when profitability remains elusive for a long time.”

Noting that most fintech players globally trade around 0.3x-0.5x price to sales growth ratio, it added, “We are unwilling to give it a premium here as we are unsure about the path to profitability.” 

“We believe Paytm’s business model lacks focus and direction,” it further said.

Its net loss for the quarter increased 34% to INR 381.9 Cr, from INR 284.4 Cr during the corresponding quarter of FY21.

Although running into losses, it witnessed a 62% growth in its revenue from operations during Q1 FY22 at INR 890.8 Cr, backed by strong growth in revenue from payment and financial services.

On Thursday (November 18th), Paytm made its stock market debut and got listed at a discount of over 9% from its issue price of INR 2,150.

Continuing the freefall, its share price closed the Monday’s session at INR 1,360.30 lower by INR 203.85 or 13.03% from its previous close.  

Its market cap at the end of the day’s trade stood at INR 88,184.67 Cr.

Founded by Vijay Shekhar Sharma in 2000, One97 Communications began its journey as a value-added service provider. It evolved over the years with different fintech solutions to become an online mobile payments firm.