Tag: Paytm

Previously, the annual salaries of  Non-Executive Independent Directors of Paytm’s board members including Mr Ashit Ranjit Lilani was set at Rs 1.65 crore, while that of and Mr. Gopalasamudram Srinivasaraghavan Sundararajan was set at Rs 2.07 crore.

With the revised remuneration structure, the annual compensation of each Non-Executive Independent Director will be capped at ₹48 lakh, with a fixed component of ₹20 lakh. The variable component will be linked to attendance at the meetings and Chairpersonship / Membership positions held in the various committee(s) of the Board, to ensure good governance. The revised remuneration structure will be in effect from April 1, 2024.

According to the company’s exchange filing, the new remuneration structure is based on the benchmarking done by the company, keeping in mind good governance practices and companies in similar sectors or types of business with similar market capitalisation.

This decision also reflects the board members’ commitment towards ensuring that the company remains financially prudent, as it works towards its intended path of profitability. 

The company is also seeking shareholder approval on reappointment of Ravi Chandra Adusumalli, Founder and co-Managing Partner of Elevation Capital to its board of directors, who is set to retire by rotation. Elevation Capital was one of the initial backers of Paytm.  With the proposed changes to its Board, Paytm reinforces its commitment to maintain the highest standards of corporate governance. 

Noida-based payments and financial services distribution major, One 97 Communications, announced a significant expansion in its credit distribution business in its Q1 FY25 earnings release. Credit card distribution continues to scale, with 12.8 Lakh activated credit cards as of June 2024, compared to 7.5 Lakh last year. Despite the cautious stance of issuers and slower industry growth, Paytm has added three new partners in the last two quarters, bringing the total to six live partners for credit card distribution.

“Our quarterly performance has been in line with our expectations, demonstrating the resilience and capability of Paytm’s products and services,” said Paytm founder and chief executive, Vijay Shekhar Sharma, addressing analysts on Friday evening. “This is just the beginning of the end of the tough times, and this quarter reflects the full impact of the challenges we faced. As a team, we are committed to navigating through these times with a focus on compliance. My team and I are committed to ensuring we return to profitable quarters,” Sharma emphasized.

In the June quarter, Paytm’s operating revenue reached ₹1,502 crore, driven by a focus on merchant additions and cost optimizations.

For One 97, profitability is driven by its ability to sell more financial services to customers. Further, it continues to enable merchants to do more commerce activities which are consolidated under its marketing services.

The fintech giant’s revenue from financial services amounted to ₹280 crore, while revenue from marketing services was ₹321 crore. The company’s contribution profit for the quarter stood at ₹755 crore, with a 50% margin. EBITDA (Earnings before Interest, Tax, Depreciation, and Amortisation) loss for the quarter was ₹792 crore, with a net loss of ₹840 crore. The company maintained a strong control over expenses, with a cash balance of ₹8,108 crore as of June 2024 (excluding ₹449 crore funds from Paytm Money Ltd).

Looking ahead, Paytm expects revenue growth and profitability to improve, driven by growth in operating metrics such as GMV, an expanding merchant base, recovery in the loan distribution business, and continued focus on cost optimization.

The company also reported that new merchant signups are reaching January 2024 levels, with a marginal increase in its merchant subscriber base to 1.09 crore. Daily merchant payment GMV (excluding disrupted products) has shown consistent improvement during the quarter and is nearly back to January 2024 levels. Monthly transacting users (MTUs) have stabilized to approximately 7.8 crore at the end of June, with GMV increasing month-on-month.

Earlier this year, Paytm received approval from the National Payments Corporation of India (NPCI) to participate in UPI as a Third-Party Application Provider (TPAP) under a multi-bank model. Axis Bank, HDFC Bank, State Bank of India, and YES Bank act as PSP (Payment System Provider) banks, ensuring Paytm’s existing users and merchants continue to perform UPI transactions and AutoPay mandates seamlessly and without interruption.

“We are fortunate to have a resilient customer base. Moving forward, we need to focus on cross-selling various financial services to our customers, both consumers and merchants. Our Average Revenue Per User (ARPU) remains stable, and we expect it to increase in the coming quarters,” Sharma added.

Addressing analysts on Wednesday, Vijay Shekhar Sharma, the founder and CEO of One97 Communications, the parent entity that operates brand Paytm, said that he is confident that the organisation will reach back to key metrics, making a strong recovery.

Sharma further added that the company has started to come back, with the focus now on ‘building large revenues and a profit-centric organisation in the long term”, post the regulators directive on its associate entity.

“The last three months have been quite a roller coaster in the journey of Paytm. We learned a lot of lessons. We learned how to become better and resilient. We also resolved ourselves to be fully compliant according to the regulator’s expectation in letter and in spirit. I’m very happy to see that our results are indicating that,” he said.

As a part of its FY24 financial reporting, the company said that it has already started to make a recovery across key metrics such as payment gross merchandise value (GMV) and additions on subscription merchants starting May. 

“We now have started to come back to those dynamics of businesses and started to build a large revenue and profit centric company in the long term,” said Sharma, adding that ‘the worst is behind the company’.

Paytm, earlier in the day announced its Q4 FY24 and FY24 results showing strong growth momentum across core payments and financial services distribution business with revenue from operations increasing 25% YoY to ₹9,978 Cr in FY24. However, in Q4FY24, the revenue declined marginally by 3% to ₹2,267 crore, impacted by temporary disruptions in business operations.

Commenting on the same, Sharma said, “In this quarter we might have two months of impact on the business, still our annual performance is better than last year. We remain committed to grow sustainably, focus on profits and focus on the core of the business which is payments.”

Moving ahead, the company’s focus is on governance for the next few quarters as it expects to onboard new independent board members in group entities as well as subsidiaries. In continuation to investing in sales teams and marketing, the company will also invest in customer acquisition, to drive market share. 

In addition, insurance and wealth can become positive for the growth of the entity, Sharma said. 

One97 Communications Limited (OCL) the parent entity that owns brand Paytm, expects that transitioning its core payment business from Paytm Payments Bank Ltd to other banks will help it de-risk its business model and open up new opportunities for long term monetisation, its founder and CEO Vijay Shekhar Sharma said in the company’s shareholder letter on Wednesday. 

Sharma’s comments come at a time when the company has become a Third-Party Application Provider (TPAP) with National Payments Corporation of India (NPCI) for the Unified Payments Interface (UPI) channel. It has partnered with – Axis Bank, HDFC Bank, State Bank of India (SBI), and Yes Bank and has started transitioning its UPI users to these banks.

“I am happy to share that we have successfully transitioned our core payment business from PPBL to other partner banks. This move de-risks our business model and also opens up new opportunities for long-term monetization, given our platform’s strength around customer and merchant engagement,” Paytm Founder & CEO Vijay Shekhar Sharma said in a letter to shareholders.

The company has also commenced onboarding new merchants, but is still awaiting the approvals for onboarding new customers. The company is in discussions with NPCI for confirmation of signing up new UPI consumers for its TPAP App.

The company has partnered with various banks for UPI customers and merchants, card acquiring and BIN sponsorship for card acceptance offering to merchants, nodal/escrow accounts for merchant fund settlement, FASTag distribution, and BBPS.

In February, the company partnered with Axis Bank for the nodal account and escrow account to continue seamless merchant settlements.

It resumed the merchant loan distribution towards the end-March post transition. Moving forward the company also said that it will focus on a distribution-only disbursement model, owing to a much bigger TAM (total addressable market), wider interest from large banks and non-banks, and easier tech integration and more regulatory clarity. The collections under this model will be managed directly by lending partners.

The distribution only loans have continued to scale well and the company has added more lending partners during the quarter, including pilots with banks.

The company’s operational revenue during the fiscal jumped 25% to ₹9,978 crore while its net loss narrowed to ₹1,423 crore, during the year.

Driven by growth and an improved contribution margin, FY24 also saw the company report  earnings before interest, taxes, depreciation, and amortization (EBITDA) before employee stock ownership plan (ESOP) of ₹559 crore.

Paytm has received Unified Payments Interface (UPI) incentives of ₹288 crore for FY24 (recorded in Q4 FY24), as compared to ₹182 crore in the previous fiscal.

One97 Communications Ltd., saw a marginal 3% decline in operational revenue for the fourth quarter of FY24 at Rs 2,267 crore, despite disruptions in payment and lending business lines after Reserve Bank of India (RBI’s) took regulatory action against its associate entity Paytm Payments Bank Ltd.

The company’s revenue from payment services grew by 26% on the year to ₹6,235 crore in FY24.  While, financial services and others revenue rose 30% YoY to ₹2,004 crore in FY24.