Mumbai : Paytm, whose shares have fallen 70% from its initial share sale price, said it expects to be operationally profitable in six quarters, even as its founder Vijay Shekhar Sharma rued the payments company. Added vesting of stock rewards with market value. Exceeding the IPO level.
In a letter to shareholders on Wednesday, Sharma said, “In the backdrop of volatile market conditions for high-growth stocks globally, our shares are well below the IPO price. Rest assured, the entire Paytm team is planning to build a major. Committed to creating profitable, profitable company and long term shareholder value. Aligned with this, my stock grant to me will be vested only when our market cap has exceeded the IPO level on an ongoing basis,” said Sharma, CEO of Paytm are also added.
Paytm’s stock has to exceed three times its current level before Sharma’s substantial stock grant can vest. Shares of One97 Communications Ltd, which operates Paytm service, have crashed since listing in India’s biggest IPO last year. Investors succumbed to its expensive valuation and lack of a clear path to profitability.
The letter to shareholders was notified to stock exchanges of the country along with quarterly updates on Paytm’s operating performance, in which Sharma said he expects Paytm to be operationally profitable in the next six quarters.
Sharma’s comments on the company’s profitability path and the business growth numbers notified by the company pushed Paytm’s stock up nearly 5%. Shares ended trading on Wednesday 639 on the BSE, up 4.9%.
Paytm sold shares to the public in November 2,150 each. Its market capitalization is approx. Was 1.4 trillion ($18.6 billion) at the IPO value, which has since dropped to . It is done 41,443 crore ($5.52 billion). Public shareholders have raised concerns about the company’s path to profitability as the payments market in India remains fiercely contested by deep-pocketed rivals such as Google Pay and Walmart’s PhonePe.
Besides, the company’s loss for the quarter ended December widened to 778 crores from a year ago, despite a 90% jump in revenue. Paytm’s loss increased so much in the September quarter 473 crore, even though it registered a growth of 64% in operating revenue.
Many brokerage firms have reduced their target prices on the stock. In a recent report, Macquarie downgraded Paytm’s 12-month target to Rs. 450. From 700 in January
Macquarie, in January, slashed Paytm’s FY21 revenue growth projections for FY26 to 23% based on an annualized growth rate from 26% earlier. Further, the brokerage said that Paytm has limited capacity to scale up the distribution business for merchant loans. To be sure, Paytm is not the only new-age technology company trading at several-month lows.
Policybazaar’s parent PB Fintech Ltd, food delivery and restaurant aggregator platform Zomato Ltd, Nykaa’s parent FSN E-commerce among others are trading well below their IPO prices.
download
The app will get 14 days of unlimited access to Mint Premium absolutely free!