Paytm is one of the largest internet companies and works extensively in finance. The company launched its IPO in November 2021, but the response was not good. Since the beginning, the company’s share has been dropping.
Paytm, the internet company which provides financial services is one of the largest internet companies in the country. The company has been facing continuous losses since its Initial Public Offer (IPO) was launched in November 2021. The IPO was a major flop for the company, the investors and board were highly disappointed by the performance. The company is still recovering from the loss incurred during the launch.
Vijay Shekhar Sharma, the founder of the company who is also currently the CEO and MD of the company, said that Paytm is all set to become India’s first ever internet company to gain revenue of $1 billion in this financial year. Further, he added that the company is recovering and the operating profits will be regained by the end of the second quarter ending September 2022. On the failure of the IPO, Vijay Shekhar commented that it was, “a sort of graduation” for the company . He appreciated the learning curve and its effects of it on the company. For me, the public listing was a sort of graduation, and taking Paytm to break even and to profit gives me a clarity of purpose, says Sharma.
About Paytm IPO
Paytm is the parent company of One97, which was founded in 2000 by Vijay Shekhar Sharma. This was started as a communications company and did not focus on financial services. In August 2010, Paytm was launched as an internet company providing financial services. The company’s rapid growth and fast expansion helped it catch hold of consumers and other citizens.
Their operations and excellent service helped the company build it further. But soon the company faced tough competition after other financial platforms were launched by big companies like Google. Even with these competitions the company has retained its position and is not losing the market. One97 filed for its IPO in July 2021, being the largest IPO offered in the country. Surely, Paytm’s IPO is the largest one ever experienced in the market.
On November 8, 2021, the company was officially listed on NSE raising ₹18,300 crores. The trading started on November 18. The share price allotted to investors was ₹2,150 per share which declined massively to ₹1,564.2 per share showing a fall of 27 percent on the first day. The company has lost nearly one-fourth of its value since the launch of its IPO. The share price has been reducing and the company over the last year faced an operating loss of nearly $350 million.
As stated by Vijay Sharma these losses are yet to be recovered and the company is currently reaching for break-even and then focusing on generating profits. The investors and board members were disappointed by the company’s performance after the launch of the IPO which was expected to be a grand success but turned out otherwise.
Sharma stated that the number of users for their application has increased this year and every day thousands of transactions happen through the app all over the country. The company’s aim to create sustainable credits has been successful and is one of the reasons why consumers prefer it. The Buy Now Pay Later (BNPL) scheme, one of its kind generated, the interest of the consumers enabling them to stick to the service provider.
The company’s lending business has expanded and in FY22 it accounted for ₹7,623 crores. Currently, the company is focused on expanding the payments network by adding more consumers as well as merchants. In the expansion, the company wants to increase the frequency of its transactions through its platform.
The company’s journey so far has been a roller coaster for all stakeholders but their initiatives and vision for the company are highly inspiring. Vijay Shekhar’s statement has added confidence in stakeholders and everyone is looking forward to the future of the company.