Learn How Paytm’s Success Fuels IPO Speculation
Paytm, the Indian fintech giant has reported continued growth in its loan disbursement sector. In January 2023, Paytm disbursed 38.65 lakh loans worth INR 3,928 crore, marking a 327% increase in value and a 103% increase in the number of loans disbursed year-on-year. In Q3 FY23, Paytm’s merchant gross merchandise volume (GMV) rose 38% to INR 3.46 lakh crore from INR 2.5 lakh crore in the year-ago quarter, with the number of devices deployed increasing from 20 lakhs at the end of Q3 FY22 to 58 lakhs at the end of Q3 FY23. The company’s average monthly transacting users (MTU) also increased by 29% YoY to 8.9 crores in January 2023.
Paytm’s substantial growth has led to positive financial results, with the company achieving adjusted EBITDA profitability during the December quarter of 2022, three quarters ahead of its estimates. Its net loss YoY has halved to INR 392 crore, while revenue from operations surged 41% to INR 2,062 crore. These positive results have resulted in a 15% surge in Paytm’s shares on the BSE, with brokerage firm Macquarie upgrading the Paytm stock two notches from ‘underperform’ to ‘outperform.’
Paytm’s loan distribution business is supported by its payment consumer and merchant base, which offers a large addressable market. It has remained focused on the quality of its book, while its merchant payments volume has seen consistent growth. Paytm’s deployment of payment devices has also continued to increase, accounting for 61 lakh merchants who paid subscriptions for its payment devices, including soundboxes.
Paytm’s successful business model has enabled it to generate subscription revenues and higher payment volumes while increasing its merchant loan distribution funnel. Its financial results and continued growth suggest that the company is well-positioned to capitalize on India’s rapidly growing IPO market, which is expected to reach a value of $1.2 trillion by 2026.