The tale of India’s biggest IPO

Paytm (Pay Through Mobile) owned by One97 Communications Limited is India’s leading fintech company with a valuation of 14.5 billion dollars. Paytm founded by Vijay Shekhar Sharma in August 2010 is specialised in digital payment system, e-commerce and finance.

Paytm allows customer to pay the seller by scanning their QR code from its own Paytm wallet or UPI which makes it fast and easy to use. But how did he get this idea? Vijay Sharma Shekhar got to know about this technology he saw Chinese mall accepting payments by just scanning a QR code from phones which was linked to their bank accounts or local wallet (Alipay). So, he thought of implementing this idea in India but in India the local sellers had no access to such scanners, this problem’s solution was to directly invert the process as everyone these days have phone with built-in scanner (camera) so Paytm provided a QR code to Merchants which could be easily scanned and the payment can be done in few seconds). This was a move that made Paytm a multibillion-dollar industry by targeting the under-served and un-served society of India.

Paytm now has more than 300 million active users, with 5 million daily transactions and is growing at around 15% every year. Paytm has more than 8,50,000 offline merchants using Paytm. Paytm is also accepted by many government sector institutions like the Indian railways.

The IPO

Paytm (One97 Comm.) has now made its entry into the Indian stock market by going public with India’s biggest IPO of $2.2 billion with a valuation of $20 billion. Paytm however couldn’t make a blockbuster entry on the bourses as it opened on a 9% discounted rate and the stock price plunged by 27.40% by the end of the session, which pegged the fintech firm’s market cap at $14.5 billion, wiping out more than 35000 Cr. market cap on a single day. This flop show makes it the holder of the title ‘ Worst listing day drawdown ‘. This title was previously held by Coffee day enterprises

Paytm has attracted many well-known investors even before the IPO. Ant group also known as Alipay, SoftBank Vision Fund, SAIF Partners, AGH, Berkshire Hathaway ( Warren Buffet), Sharma Holding company these are some of the majority stakeholders in the company.

The Company’s income channels...

Paytm earns most of from the interest it gets from escrow account in a nationalised bank, Paytm wallet money goes to this account on which it earns a massive interest. Paytm also earns from advertisements, commissions from offline merchants and portal charges when large number of transactions are done by a single person on a single day. It also allows to buy gold digitally which fetches them a small commission. It has also launched an online B2C service called Paytm Mall. It currently has about 14,000 rupees registered sellers The company aims to generate additional income through financial commerce like aggregating sales of insurance and mutual funds through its platform.

Paytm Payments bank

In 2015, Paytm was licensed by the Reserve Bank of India to establish Paytm Payments Bank as an independent entity. The Bank was officially launched in November 2017. It aimed to have more than 100,000 branches across India. However, the bank is not yet in the double-digit range.

International expansion

Paytm has also tried to expand its business in foreign countries like Canada and Japan by launching a venture named Paytm labs in Canada for bill payment reward program and Paypay app in Japan for digital payments.

Do u think Paytm can reward disappointed investors even after this bloodbath?