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Paytm IPO Filing Shows Indian Consumer Rebound As Lockdowns Ease

Paytm, joining the listing parade on stock exchanges around the world, is showing signs of recovery from the pandemic.

As has been reported, India’s largest mobile payments and commerce platform intends to list shares in India in an offering that might raise as much as $2.2 billion, valuing the company at $25 billion.

Drilling down into the “draft” prospectus, parent company One97 notes that its payment services, commerce and cloud services and financial services reach 333 million consumers and over 21.1 million merchants as of the end of the latest financial year, at March 31, 2021.

In reference to payments, the company said that its GMV was 4 trillion rupees ($54 billion) in FY 2021, having processed a total 5.9 billion merchant transactions over the same period. Breaking down the separate lines of business, Paytm processed a total commerce GMV of 142.2 billion rupees ($2 billion), which was down 42 billion rupees ($563 million) due to the pandemic.

A Rebound Takes Shape 

But the recovery is seemingly underway. “Since lockdowns eased in India in the second quarter of FY 2021, our average monthly GMV per MTU for each quarter has grown consistently and has exceeded pre-COVID-19 levels,” according to the filing. That monthly tally stood at a bit more than 9,700 rupees ($130) in the first quarter of fiscal year 2022 (the current year) versus about 8,400 rupees ($113) in the previous quarter.

Monthly transacting users grew to 50.4 million in the current quarter, roughly flat from the previous quarter and up from 39.8 million in the year-ago fiscal first quarter.

“We are able to attract consumers by offering daily life use cases such as bill payments, mobile top-ups, money transfer, online and in-store payments, entertainment and travel tickets, online games, mini-apps across food delivery, eCommerce, ride-hailing and more,” the filing stated.

Paytm also noted that its financial services business is gaining traction, tied in part to growing transaction volumes. The number of total loans disbursed in the fourth quarter of FY 2021 was 1.3 million, surging from the 881,000 in the previous period. The company implied a strong greenfield opportunity in investments, as the number of users taking advantage of stock brokering services at present is less than 1 percent of the installed user base. “As of March 31, 2021, we, together with Paytm Insurance Broking Private Limited, had 11.3 million unique insurance customers and had sold 31.5 million cumulative attachment products and insurance policies,” the filing noted.

The company’s financials show revenue from consolidated operations of 28 billion rupees ($375 million), with 58 percent stemming from payment and financial services and 34 percent from cloud and commerce.

Building the Ecosystem 

Paytm company President Madhur Deora told Karen Webster that the company has managed a heady pace of growth through the past several years. “Compared to where we were around the time of demonetization, in terms of scale, we are probably 15 times bigger than we were then,” he said.

Later in the interview, in illustration of the ecosystem that is being built, he said that “we created our payments product to go wide and deep for customers — they can pay their school fees, order food, order up an Uber.”

In addition, in describing Paytm’s reach across channels: “We made offline payments possible with the use of a standard button. [But] that all takes us to the next logical piece, which at this point starts to look a little bit like a ‘super app.’ The user can take all those payments they can make from the Paytm app and build a hub [to] manage their life issues.”

Read More On Paytm:

Paytm Aiming For $2.2B IPO In India At $25B Valuation Today In Connected Economy: Echelon Fitness Considers Strategies To Reach $1B Valuation; Klarna Buys HERO Paytm Seeks To Raise $268M Ahead Of IPO India’s Paytm Eyes Potential $2.2B IPO Ahead Of Investor Vote Next Week

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