IGI Logo

Company Background

One97 Communications Limited (“Paytm”) was incorporated on December 22, 2000. The company is India’s leading digital ecosystem for consumers and merchants. Paytm offers ‘Payment Services’, ‘Commerce and Cloud Services’, and ‘Financial Services’ to 33.3 crore consumers and over 2.18 crore merchants registered with them, as of June 30, 2021. Their 2-sided (consumer and merchant) ecosystem enables commerce, and provides access to financial services, by leveraging technology to improve the lives of their consumers and help their merchants grow their businesses.

The company launched Paytm in 2009, as a “mobile-first” digital payments platform to enable cashless payments for Indians, giving them the power to make payments from their mobile phones. Starting with bill payments and mobile top-ups as the first use cases, and Paytm Wallet as the first Paytm Payment Instrument, they have built the largest payments platform in India based on the number of consumers, number of merchants, number of transactions and revenue as of March 31, 2021.

They have created a payments-led super-app, through which they offer their consumers innovative and intuitive digital products and services. They offer their consumers a wide selection of payment options on the Paytm app, which includes:

* Paytm Payment Instruments, which allow them to use digital wallets, sub-wallets, bank accounts,buynow-pay-later and wealth management accounts; and

* Major third-party instruments, such as Debit and Credit Cards and Net Banking

Paytm is the only payments company in India that, together with their affiliates, owns each layer of the payment stack. It offer services such as Paytm Wallet, Paytm QR, Paytm Soundbox, Gold investments and Fixed Deposit, Paytm Postpaid, Merchant Cash Advance and FASTag.

On their app, they enable their consumers to transact at in-store merchants, pay their bills, make mobile top-ups, transfer money digitally, create and manage their Paytm Payment Instruments, check linked account balances, service city challans and municipal payments, buy travel and entertainment tickets, play games online, access digital banking services, borrow money, buy insurance, make investments and more.

The company is a professionally managed company and does not have an identifiable promoter.

Valuation & Recommendation

Leveraging the large scale, reach, and deep and high frequency engagement by consumers and merchants on their payments platform, they have been able to add new payments offerings, as well as expand into commerce and cloud services and financial services. Each of their offerings increases the scope of their ecosystem for consumers and merchants, enhancing the value of their ecosystem.

We recommend a subscribe rating to the issue for the purpose of listing gains but advise caution as at the upper end of the price band, Paytm is valued at 49.7x its FY21 revenues. Increased competition from new entrants could continue to keep profitability in control.

To Read Complete Report & Disclaimer Click Here

SEBI Registration number is INH000000081.

Please refer disclaimer at https://geplcapital.com/term-disclaimer

Above views are of the author and not of the website kindly read disclaimer