The Company was incorporated on 22nd December 2000. The Company carries on the business inter alia to provide Telecom based value-added services to various telecom operators across the Territory, Payment gateway aggregator services, Ticket services, Utility bills payments, Insurance, Hotel booking services etc. They got a real boost in their sales during demonetization in 2016.
Financial Performance in 2018-19
| Particulars | 2018-19( Cr) |
| Total Income | 3579 |
| Depreciation | 99.51 |
| Tax Expense | -6.49 |
| Total Expenses | 7730 |
| Net Profit/(Loss) | -4172 |
| Paid-up Capital | 57.3 |
| Reserves & Surplus | 5738.68 |
The reason for loss or inadequate profits:
The Company has incurred huge capital expenditure in creating a brand and establishing its business activity. They have incurred a considerable amount in various capital & operational expenditures which resulted in losses during the financial year.
Steps to be taken or proposed to be taken for improvement:
The Company is focusing on strengthening its position in various business segments like Payments Bank, Insurance and Insurance Broking, travel ticketing, hotel, mobile wallet services, etc. and that would result in a better turnover in the coming fiscal years.
They have created “Paytm” as a popular brand and platform which provides ease of online marketplace, mobile wallets, recharges and Payment Gateways Aggregator services, Payments Banking Services, etc.
Foreign Investment or Collaboration
The Company has received Foreign Direct Investment under FDI guidelines. IN 2018-19, out of total paid-up capital, 83.04% (approx.) is held by Foreign investors under the Foreign Direct Investment scheme of RBI. Further, the Company has the following wholly-owned subsidiaries and joint ventures overseas:
| Name of the Entity | Status | Country |
| One97 Communications Singapore Private Limited | Wholly owned Subsidiary | Singapore |
| One97 Communications Nigeria Limited | Wholly owned Subsidiary | Nigeria |
| One97 USA Inc. | Wholly owned Subsidiary | USA |
| One97 Communications FZ-LLC | Wholly owned Subsidiary | Dubai |
| Ciqual Limited | Joint Venture | UK |
| Total Available Shares: | 50000 |
| Face Value: | ₹ 10 Per Equity Share |
| ISIN: | INE982J01012 |
| Lot Size: | 5 Shares |
| Current Unlisted Share Price: | ₹ Best in Industry Per Equity Share |
| Particulars | 2018-19 (in Crores) | 2017-18 (in Crores) | 2016-17 (in Crores) |
| FV | 10 | 10 | 10 |
| Revenue | 3579 | 3314.8 | 780.19 |
| Expense | 7730 | 3884.95 | 1961.29 |
| PAT | -4172 | -1604.34 | -899.64 |
| EPS | -743 | -318.44 | -194.73 |
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Mangesh
Various dealers are quoting Paytm current price around 11000-12000 for 10 Rs face value. But whenever IPO would be launched most likely price would be lower most likely due to additional share capital infused in company. How does that impact existing shareholders who have bought shares at current price?
Umesh Paliwal
Yes, before IPO new shares will be issued in the form of bonus shares and all the shareholders will get the shares accordingly.
AKOOL
Can we have a link to One97’s subsidiary structure? I am assuming Paytm, Paytm Money, Paytm Mall are its three main subsidiaries. Is that correct?
AKOOL
Available shares are 50,000? Who is the seller? Can we have some info on the seller and why they are looking to sell so many shares?
Umesh Paliwal
Paytm has given lot of ESOPs to their employees. So, mostly the sellers are employees who wants to cash in the opportunity available in the unlisted market.
Market Wizard
Fintech major Paytm on Monday said it will partner with various credit card issuers to introduce co-branded cards and is aiming to add 20 lakh subscribers in the next 12-18 months. Paytm, in a statement, said it is aiming to transform the credit market by enabling ‘new to credit’ users to join the digital economy
Read more at: https://yourstory.com/2020/10/paytm-co-branded-credit-card-digital-economy-bhavesh-gupta
Market Wizard
https://unlistedzone.com/paytm-reduces-losses-by-40-in-2020-21-is-it-on-the-right-track-towards-profitability/
Market Wizard
1. Paytm has written to RBI to get the in-principal approval for getting a small finance bank license.
2. The Payment bank licenses were given by RBI in 2016 and further, it was mentioned that once any payment bank completes 5 years of operation, they can apply for Small Bank License.
3. Paytm will become eligible for Small Finance Bank License in 2022. However, it is applying so that it can get approval and as soon as 5 years get completed, it will start lending.
4. In Payment Bank, the licensee can’t do lending.
5. So, Small Finance Bank will add a lot of value in Paytm revenue in future.
Market Wizard
Paytm Payment bank has shown back to back profitability in the last 2 years.
https://unlistedzone.com/paytm-payment-bank-has-shown-profitability-in-last-2-years/
SUBHAJIT BISWAS
What is the rate for Buying 15-20 Shares?
Market Wizard
10700
Market Wizard
Paytm foraying into Credit business:
https://unlistedzone.com/paytm-is-foraying-into-credit-business-11-06-2020/
Market Wizard
https://twitter.com/ZoneInvestor/status/1269810551338659842?s=19
MakeitHappen
Looking at the latest numbers, seems like Paytm did take a big hit in 2019. What is the CMP if one discounts this increasing competition in real time payments, investment apps etc
Market Wizard
CMP is already discounted by 25-30% from the last funding valuation that had happened in 2019. The last funding was done at Rs. 17000 per share by Softbank and many other investors. Check this out!!
https://unlistedzone.com/1billion-funding-for-paytm-and-ipo-plans-26-11-2019/
As of 31.05.2020, the CMP is around 12000-13000.
Yes, the competition is increasing among the payments app and latest edition of Watsapp will make life tough for Paytm. It is a make or breaks situation for Paytm now and the same was conveyed to Mr. Vijay Shekahar in the last funding round. We will have to see how Paytm face this challenge and come out winning.
Stagflator
hi! any idea how many total shares of PayTM are currently floating? Also, in case they choose to list in nyse, how will that affect owership? thanks for taking time out to answer these questions. apologies if they have been asked before
Market Wizard
Good opportunity for Paytm Payments Bank to encash Small Finance Bank License. See what UnlistedZone has to say on new RBI guidelines.
https://unlistedzone.com/rbi-guidelines-to-setup-small-finance-bank-for-existing-payment-banks-06-12-2019/
Market Wizard
As per the news published in Moneycontrol, the PhonePe App of Flipkart acquired by Walmart last year may be valued at around 10 Billion dollars. Last year when Walmart bought Flipkart, it was valued around 20 billion dollars. So roughly we can say as on date the cumulative valuation of Flipkart and PhonePe is $30 Billion.
Recently, Walmart has infused $280 Million in PhonePe in two tranches to compete in the market.
The company is facing the biggest competition from Paytm and Google Pay. Google Pay recorded more than 240 million transactions in May-19, which beat both Flipkart-owned PhonePe, which had around 230 million UPI payments last month and Paytm having 200 million transactions as per an Economic Times report.
Facebook will be launching Watsapp Wallet next year. With Watsapp’s world-wide reach and huge customer base, the competition is going to be tough for existing players. So we might not able to see the kind of growth in the existing wallets in future.
Market Wizard
Paytm News:
https://unlistedzone.com/paytm-has-given-diwali-bonus-in-the-form-of-esop-22-10-2019/
Market Wizard
UnlistedZone Research Report on Paytm Unlisted Share:
https://dyvmwwyqozzzb.cloudfront.net/main/Paytm-2.pdf
Market Wizard
*Paytm- Quick Stats*
Revenue in 2017-18 ~ 3050 cr
Revenue in 2018-19 ~ 3232 cr
Loss in 2017-18 ~ 1600 cr
Loss jumps in 2018-19 ~ 4200 cr
Market cap in 2017-18~ $9bn
Market cap doubles to ~ $18 Bn
Market Wizard
https://dyvmwwyqozzzb.cloudfront.net/main/Paytm-Pilling-losses.pdf
Anil
How does a retail investor make profit after buying at current price of 18,000/- per share? What will be the price if this ever goes to IPO?
Market Wizard
Retailers were asking the same question last year when the share price was around 8000-10000. In the meanwhile Warren Buffet Investment Company Berkshire Hathway did strategic investment somewhere around 12000-13000 per share. After this news came in the market the demand for Paytm multi folds which has dragged the price to 17k-18K level.
We at UnlistedZone too feel that it is slightly overvalued but if nobody wants to sell at a lower level then there is no option but to buy at those level which is available in the market.
Paytm is likely to face huge competition this year with the launch of WatsApp Pay.
https://economictimes.indiatimes.com/tech/internet/mark-zuckerberg-vs-vijay-shekhar-sharma-whatsapp-pay-can-gobble-up-paytm/articleshow/69183215.cms
Kishan
Max amound paid per share is around 10500/share in 2017/18, now they are asking 18000/share almost @double price so why one should pay double amount rather than in market many great business models are available at much lover price so one can plan investment in them
Market Wizard
Sir, the Indian E-commerce industry in the last 10 years have seen tons of startup started and went into ash.
Today the E-Commerce business is a cash-consuming model as the competition is super tough in the market but in future, it will be a cash cow. We have seen how Flipkart which was started10 years ago has not generated a profit in a single year but sold to Walmart at Rs. 1 Lakh Crore which is the biggest business acquisition in the history of India. So if Walmart is buying loss-making entity at such valuation must have seen something in the company which you and I at this stage can’t see.
I agree that these companies today are not making any profit but please understand that this is the consolidation phase going for the sector and in coming few years we will see 1-2 companies dominating in the sector and all other either will vanish or will be acquired by biggies.
The opportunity in India for the E-commerce market is huge. As per statistics, e-commerce penetration is strands only 28% and the growth of the sector is projected to grow at CAGR of 23% in the next 5 years. The few companies which will survive will become cash-cow. The Paytm would be one among them without any doubt.
Market Wizard
Good News for Paytm Payment Bank
Paytm Payment Bank Limited has resumed adding KYC of the new bank and wallet customers which was stopped by RBI in June last year due to some observation made by the audit committee.
The RBI has given there nod to start adding new customers from 31.12.2018 onwards. Now the potential customer can open a saving or current account with the payment bank.
Paytm Bank is expecting to add an additional 10 Cr customers by the year-end.
Market Wizard
Paytm to Enter in Broking and Mutual Fund Business- This will shake up the entire Broking Industry.
After entering the financial products distribution market with mutual funds, Paytm Money wants to offer shares of listed companies directly to customers. The firm is expected to submit its application within two weeks to either of the two exchanges, BSE and the National Stock Exchange (NSE).
Ashishkumar Chauhan, chief executive officer at BSE, said: “If they wish to apply for a broking license, we would be delighted to welcome them.”
Paytm Money had launched an app to offer mutual fund products to its clients. Close to 1.07 million customers have already registered for the service. At present, more than 10,000 customers a day are allowed access to the app to be able to buy and sell mutual funds.
By offering direct equities, Paytm Money aims to attract slightly more sophisticated investors.
Paytm’s entry could potentially shake up the markets and bring in new investors, given the lack of penetration of household savings in financial instruments, according to market experts.
Paytm claims to have more than 350 million registered users.
The question is how will Paytm ensure that investors don’t churn frequently.
One of Paytm Money’s advantages is that it can offer products at low cost. It already offers direct plans of mutual funds, which do not involve distributor commissions and thus come at a lower cost. Besides, it does not charge an advisory fee. It remains to be seen if it waives off brokerage charges along the lines of Zerodha, which does not charge if you take delivery of stocks bought on its platform.
Ramesh
What are the other businesses into which PAYTM wants to enter in future
Market Wizard
Hotel Booking, Bus travel etc.
Market Wizard
India’s largest payment services provider Paytm said Warren Buffett-owned Berkshire Hathaway Inc. has invested an undisclosed amount in the company, in a rare deal for the world’s best-known investor who typically avoids internet firms. One97 Communications Ltd, which owns Paytm, also said Berkshire’s investment manager Todd Combs who was leading the investment discussions will join its board.
Mint first reported on Monday that Buffett’s Berkshire Hathaway is set to buy a 3-4% stake in One97 for ₹ 2,200-2,500 crore, the billionaire investor’s first investment in an Indian company.
Market Wizard
It is a must buy stock in everyone’s portfolio. The company is foraying into every other business ranging from MFs, Insurance, Travel-Ticketing, etc to reap the benefit. The company has tie-up with all the Toll tax companies wherein the company is putting fast tags for seamless movement of traffic in tolls booth. So overall we can say the company is worth to consider for investment.
Kishan
They are selling to retailers @ much higher rate…so how one can plan investment at such high rate & in one year company had not posted any magical profit figures so people think of paying higher amount even losses are widen in current fiscal year