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PAYTM IPO

  • Writer: Yash Mehta
    Yash Mehta
  • Nov 7, 2021
  • 2 min read


IPO Details:

Price Band: 2080-2150

Cutoff Price: 2150


About Company:


We have covered Paytm business in India. We have discussed what are the growth drivers and projections for the industry. How did Paytm grow in last one decade? Who are the competitors? One can check the detailed blog on using this link: Paytm Karo.


Paytm is India’s leading digital ecosystem for consumers and merchants as they have built the largest payments platform in India, based on the number of consumers, number of merchants, number of transactions and revenue as of March 31, 2021. Paytm offers payment services, commerce and cloud services, and financial services to 337 million consumers and over 21.8 million merchants, as of June 30, 2021. Their two-sided (consumer and merchant) ecosystem enables commerce, and provides access to financial services through our financial institution partners, by leveraging technology to improve the lives of our consumers and help our merchants grow their businesses.




Competitive Strengths:

  1. Paytm ecosystem allows them to address large market opportunities.

  2. Trusted brand, scale and reach.

  3. Insights of Indian consumers and merchants.

  4. Product and technology DNA.

  5. Network effect creates sustainable advantages.

  6. Leadership and Culture.


Strategies:

  1. Grow consumer and merchant base.

  2. Expand and enhance Paytm App’s offerings for consumers.

  3. Deepen merchants’ partnerships and drive adoption of technology among merchant base.

  4. Rapidly scale up financial services and expand access of financial services through deep tech-led solutions.

  5. Expand into international markets.


Financial Performance:







Although the company is fintech business, still Paytm revenue had decreased in last three years. Company is burning cash for years and this can be seen with negative net profit and earning per share. Checking P/E in this case won't be useful. Company's Price to Book value is around 16.


Objects of the Issue:

The Net Proceeds from the Issue are proposed to be utilised in the following manner:

  1. Offer for Sale

  2. Growing and strengthening our Paytm ecosystem, including through acquisition and retention of consumers and merchants and providing them with greater access to technology and financial services

  3. Investing in new business initiatives, acquisitions and strategic partnerships

Competitors Comparison:


There are no direct competitors listed in Indian equity market. Paytm is now diversified into many businesses, as discussed earlier. In India there are many competitors of Paytm across different business line. Every business line if I want to find out the competitors then it would like this:

  • Wallets:

  1. Mobikwik

  2. PhonePe

  3. Freecharge

  • Payment Bank:

  1. Airtel Payment Bank

  2. Fino Payment Bank

  • Payments:

  1. GPAY

  2. BHIM

  3. PhonePe

  4. Mobikwik

  • Online Shopping:

  1. Amazon

  2. Flipkart

  • Brokers:

  1. Zerodha

  2. Upstox

  3. ICICI Direct


Grey Market Premium:


Our view: GMP of the stock is not that good and also the stock is valued at around 16x Price to Book Value. We can expect this IPO to list at a very small premium because of the euphoria. Company financials are also not good.

I would avoid this IPO and won't subscribe to this.



Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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