Paytm sees no impact from lock-in expiry, trends show heavy buying

India's largest fintech company Paytm saw its mandatory lock-in expiry end today, with 86 per cent of its shares becoming free to trade.

Trends showed that the lock-in expiry had minimal or no impact on the company's share price, which was trading at Rs 637, down 0.2 per cent at 10:30 am.

In fact, details on BSE show that more shares were being bought than sold.

Paytm counts the likes of Warren Buffet, SoftBank, Elevation Capital, and Alibaba as its long-term investors.

Top brokerage firms such as JP Morgan, Morgan Stanley, Goldman Sachs, ICICI Securities, Dolat Analysis and Research Themes, and CITI have extended their confidence in Paytm's strong performance.

The company recently announced Q2 FY23 financials and posted a 76 per cent yearly growth in revenue to Rs 1,914 crore.

Meanwhile, the company's losses were reduced by 11 per cent on a sequential basis. The company's contribution profit surged 224 per cent year-on-year to Rs 843 crore.

Recently, in a shareholder letter, the founder and CEO Vijay Shekhar Sharma, said: "We are now excited about the next year of our journey, as we get close to EBITDA profitability and free cash flow generation."

In fact, brokerages like JP Morgan, and Goldman Sachs expect Paytm to achieve its breakeven target ahead of September 2023.

On Monday, the company announced that it had disbursed 3.4 million loans in October, registering a yearly growth of 161 per cent.

The value of total loans disbursed in October grew to Rs 3,056 Cr (USD 407 million, year-on-year growth of 387 per cent).

Paytm's leadership in offline payments strengthened further with its total merchant subscription devices deployed increasing to 5.1 million.

With its subscription-as-a-service model, the strong adoption of devices drives higher payment volumes, and subscription revenues, while increasing the funnel for merchant loan distribution.

For October, the total merchant gross merchandise value processed through Paytm aggregated to Rs 1.18 lakh crore (USD 14 billion), marking a yearly growth of 42 per cent.

Sharma, in his letter further wrote that the payment revolution continues in India, with merchants and users enthusiastically adopting digital payment technology.

The government's incentives for UPI payments and merchants' adoption of its devices and subscription product, is making payments increasingly "monetizable and profitable" for the company.

Talking about the company's rapidly growing lending business which is now at an annualised run rate of Rs 37,000 crore in the month of October, Sharma said, "In parallel, we are now scaling up lending distribution which can bring financial inclusion to hundreds of millions of people in our country."

"Due to the huge demand for lending in our country, our low penetration and the compounding nature of our lending journey, we are extremely optimistic about the prospects of our lending business," Sharma added.

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