Shares of Paytms fell as much as 7.7% in early Friday trading.
New Delhi: India’s digital payments giant Paytm will undergo another round of scrutiny on Saturday as it reports earnings following a record initial public offering and full stock market debut. fluctuations.
Ahead of the results, shares of Paytm fell as much as 7.7% in early Mumbai trading on Friday. Although the stock has rallied about 32% in the past three days, it is still well below the price set during the $2.5 billion IPO as investors continue to weigh its long-term prospects. .
Ruchit Jain, head of research at listed discount broker 5paisa.com, said: “Paytm’s revenue has remained more or less flat despite its increased customer base over the past few years. “Despite the reduction in losses, none of the businesses, such as payments, consumer lending or insurance distribution, have shown signs of being profitable.”
Jain said it will focus on which segments are starting to make more money and how the company leverages its customer base to cross-sell more products.
Despite the challenges, Paytm backers include Berkshire Hathaway Inc. of Warren Buffett and Masayoshi Son’s SoftBank Group. BlackRock Inc. and Canada Pension Plan Investment Board were among so-called fixed investors in the IPO that bought more shares on Tuesday and Wednesday. , according to people familiar with the matter.
Chakri Lokapriya, Investment Director at TCG Advisory Services, said: “The road to profitability for Paytm is very long. “Nearly 75% of the company’s business is digital payments, which is now a highly competitive segment where customer retention is a challenge.”
Lokapriya says he’s keeping an eye on new customers and merchants at Paytm, and provides updates on new businesses and initiatives to improve “customer engagement” and promote products. loan and insurance products.
In a post-launch exchange filing, Paytm said its total merchandise value increased 131 percent year-on-year to Rs 83,200 crore ($11.2 billion) in October during the critical period before Diwali holiday. It also disbursed 1.3 million loans and deployed an additional one million point of sale devices.
This failed to impress Macquarie Capital Securities Pvt.
Paytm’s quarterly and semiannual results announcements on Saturday will be followed by a 6pm earnings call.
