Online payments service provider Paytm's parent company One97 Communications has completed its first year in stock markets. Paytm which came out with the country's second largest share sale via initial public offering (IPO) in November last year raised Rs 18,300 crore from the IPO which comprised of an Offer For Sale (OFS) worth Rs 10,000 crore and fresh issue of Rs 8,300 crore.
The company sold shares in the price band of Rs 2,080-2,150 per share during the three-day share sale which ended on November 10, 2021. The IPO got a lukewarm response from investors as the issue was subscribed only 1.89 times. The stock has been one of the biggest wealth destroyers among the newly listed companies on the stock exchanges.
The Vijay Shekhar Sharma-led Paytm stock has plunged a whopping 70 per cent from its IPO price of Rs 2,150 to Rs 651.95 (Monday's closing price). The stock had dropped as much as 76 per cent to hit 52-week low of Rs 511 on the BSE, data from stock exchange showed.
The stock made a weak stock market debut and has been facing selling pressure ever since. Paytm shares opened for trading at Rs 1,955, around 9 per cent lower from its IPO price on its very first day of trading and settled 27 per cent lower at Rs 1,564.
Meanwhile, the losses for the company are also widening. Paytm on Monday reported widening of consolidated loss to Rs 594 crore in the second quarter ended September 30, 2022. The company had posted a loss of Rs 481 crore in the same period a year ago, Paytm said in its regulatory filing.
Paytm's consolidated revenue from operations, however, increased by about 76 per cent to Rs 1,914 crore during the reported quarter from Rs 1,086.4 crore in the September 2021 quarter.
Paytm said that its revenue from payment services to consumers increased by 55 per cent to Rs 549 crore on year-on-year (Y-o-Y) basis while payment services to merchants went up by 56 per cent to Rs 624 crore Y-o-Y.
"This was achieved without any UPI incentive during the quarter," the company said.
The company's net payment margin (calculated as payments revenues plus other operating revenues, minus payment processing cost) increased multi-fold to Rs 443 crore Y-o-Y basis on account of improved monetisation and continued focus on reduction in payment processing charges.
The company's revenue from the financial services business was up 293 per cent to Rs 349 crore on Y-o-Y basis and now accounts for 18 per cent of total revenue, compared to 8 per cent in September 2021 quarter.
Investor community is after Paytm to showcase growth and market will reward only when they show growth in revenue and bottom line, Vijay Chopra of Enoch Ventures told Outlook Business.
Paytm had the first mover advantage and now there are lot of competitors in the market like MobiKwik, PhonePe and Google Pay which are disrupting the online payments space. Paytm will have to show drastic improvement in their bottom line. The investor lock-in will also get over which will add to selling pressure for the stock going ahead, he added.