Shares of One97 Communications Ltd, the parent company of fintech major Paytm, fell 0.33% today even though the company announced its loan disbursal business grew 150% during the two months ending November 2022. The Paytm shares opened a gap-down at ₹538.05 but rose to an intra-day high of ₹550.95. The stock soon saw a sell-off and are currently trading 0.70% down at ₹541.85 (10.14 AM). The BSE Sensex is currently trading marginally higher at 62,207.73 levels, while the Nifty is up 0.089% at 18,513.10.

In its monthly update on operating performance for October and November 2022, Paytm said it disbursed loans worth ₹6,292 crore in October-November, while its loan distribution business scaled to 6.8 million loans in volume terms. The overall subscription for payment devices exceeded 5.5 million while the average monthly transacting users (MTU) on the Paytm app grew 33% to 84 million. The merchant payment volumes (GMV) for the two months ended November 2022 increased 37% to ₹2.28 lakh crore.

"Our loan distribution business (in partnership with top lenders) continues to witness an accelerated growth with disbursements through our platform now at an annualised run rate of ₹39,000 crore in the month of November," a Paytm exchange filing stated. The total merchant GMV processed for the two months ended November 2022 was ₹2.28 lakh crore, marking a YoY growth of 37%. As per Paytm, its focus over the past few quarters continues to be on payment volumes that generate profitability, either through net payments margin or from direct upsell potential.

Meanwhile, the fall in Paytm shares comes after a rally of nearly 7% on Friday as its board announced to consider a share-buyback proposal on December 13.

Paytm, which made its market debut on November 18 last year, is one the worst performer among recent extensive initial public offerings (IPOs). It has wiped off over 75% of investors' wealth (from its issue price of ₹2,150) since its listing. In the last year, Paytm shares have delivered a negative return of 67% to its shareholders, while it has fallen 15% in the past six months. The stock hit an all-time low of ₹439.60 on November 24, 2022, while it touched a record high of ₹1,961.05 on its listing day.

Earlier this month, Paytm founder and CEO Vijay Shekhar Sharma said in an analyst meeting that the company expects its blended net payment margin, the difference between payment revenues and processing charges, to stabilise at 5 to 7 basis points (bps) due to an increase in the share of UPI in the payment business. He said the company currently earns a net payment margin of 7 to 9 bps of the gross merchandise value (GMV) on processing. "Of which, UPI gives us 3 to 4 bps and other instruments give us 15 to 18 bps. Since UPI is growing faster than other instruments, we expect the blended margin to stabilise at 5 to 7 bps," he added.

Paytm had reported a consolidated net loss of ₹571 crore in the July to September quarter this year against ₹472 crore in the same period last year. The revenue from operations witnessed a surge of 76% to ₹1,914 crore year-on-year (YoY) in the September quarter of FY22 against ₹1,086 crore in the same period last year.

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