Paytm, one of the most valuable startups of Indian startup ecosystem, is all set to start its public offerings in coming weeks. But it was not a straightforward decision for Paytm to start its initial public offerings(IPO). Earlier, fintech major had set few goals before deciding about the IPO. Cutting losses, the surge in net worth, and increasing revenue were the three major goals set by Paytm.
Paytm Achieved Decline in Losses, and Surge in Revenue and Net Worth During 2019-2020
India is badly affected due to covid second wave. It has also disturbed the Indian economy. But the difficult situation could not stop Indian startups to grow. Global investors have shown immense trust in Indian firms.
India saw fourteen startups get unicorn status within five months of 2021. Not only the unicorns, but few startups including Zomato, Delhivery are ready to start their IPO in the coming months.
Paytm is also one such Indian startup that is going to offer the biggest IPO in Indian History. The company plans to have an IPO of $3 billion.
Paytm decided to start its IPO only when it will reduce the net losses. It also targeted more revenue and high net worth to initiate public offering. And that is what happened in FY2020. In the fiscal year 2020, Paytm recorded a net loss of Rs 2833.18 crore, as per the Tofler report.
In FY2019, the company recorded a loss of Rs 3959.64. A decline in net losses by more than Rs 1000 crore prompted Paytm to think about the public offerings.
Revenue and net worth wise also, Paytm touched an all-time high in 2019-20. Fintech firm saw a slight increment in its revenue from Rs 3049.87 crore in 2018-19 to Rs 3115 crore in FY2020. In its net worth, Paytm recorded a surge of approximately 40% to Rs 8411 crore as on March 31, 2020.
What Research Firm Bernstein Says about Paytm?
Talking about the exponential growth of Paytm, Bernstein reported:
“Paytm has come a long way from a simple digital wallet business to an integrated payments ecosystem…With increased financial discipline, Paytm is on track to break even in 12-18 months.”
Paytm saw an all round surge in last few years. It’s valuation has also surged from $16 billion to $20 billion that makes it the most valuable firm in indian startup ecosystem.
Its subsidiaries include One97 Communications India Pvt Ltd, Paytm Entertainment, Paytm Money, Paytm Financial Services, Paytm Insurance, Mobiquest Mobile Technology and Nearbuy India Private Ltd apart from other ventures such as Paytm Payments Bank and Paytm Life Insurance.
Bernstein report further stated that company’s user base has grown to 50 million. It also has a huge merchant network of 20 million. And the Paytm has been has been installed over 350 million times.
It further added:
“Paytm has realigned strategy to focus on merchant payments (on wallet and UPI) and is building a comprehensive merchant payment solution for both offline and online merchants.”
In terms of UPI transactions, Paytm Payments Bank app ranks third after PhonePe and GooglePay.
Paytm has come a long way from a simple digital wallet to a one-stop solution for different financial services. It will be interesting to see how Paytm IPO will perform.
