Paytm’s payment volumes surge 40% YoY in March quarter; stocks surge

Shares of One97 Communications, the parent company of Paytm, surged 1.41% on Wednesday to hit an intraday high of ₹648 apiece on the Bombay Stock Exchange (BSE) after the fintech major clocked a 40% year-on-year (YoY) growth in the merchant payment volumes (GMV) to ₹3.62 lakh crore in the January to March quarter of this year. The company’s merchant payment volumes stood at ₹2.59 lakh crore in the same period last year.

On Wednesday, the share price of One97 Communications opened a tad lower at ₹637.20 on the BSE as against the closing price of ₹638.95 in the previous session. During the session, the company’s market capitalisation stood at ₹40,961 crore with as many as 1,67,501 shares exchanging hands on the BSE against the two-week average of 3.6 lakh shares. Vijay Shekhar Sharma-led company hit a 52-week high of ₹844 on August 8, 2022 and it hit a 52-week low of ₹439.60 on November 24, 2022.

"Our focus over the past few quarters continues to be on payment volumes that generate profitability for us, either through net payments margin or from direct upsell potential," the company says in a regulatory filing.

"Our loan distribution business (in partnership with our lender partners) continues to gain scale with disbursements of ₹4,468 crore ($544 million, y-o-y growth of 206%) and 4.1 million loans (y-o-y growth of 63%) disbursed in the month of March 2023 through the Paytm platform," it adds.

During the quarter under review, Paytm disbursed ₹12,554 crore loans to its lender partners, registering a growth of 253% YoY as against ₹3,553 crore in the same period last year. "Our payments consumer and merchant base offers a large addressable market, thereby providing a long runway for growth. We continue to work with our partners to remain focused on the quality of the book," Paytm says.

The company's average monthly transacting users (MTU), registered a growth of 27% YoY to 90 million reflecting the continued expansion of its customer base during the March quarter. The average monthly transacting users stood at 71 million in the same period last year.

According to Paytm, subscription devices like Soundbox and POS machines continue to see increased acceptance by merchants, driving additional payment monetization for the company. The number of merchants paying subscriptions for payment devices reached 6.8 million as of March 2023, with an increase of one million during the quarter under review.

The development comes a week after the Reserve Bank of India (RBI) gave a 15-day extension to Paytm Payments Services Limited (PPSL) to resubmit its application for the payment aggregator license. The company can, however, continue with its online payment aggregation business. On November 26 last year, the apex bank asked One97 Communications to re-submit its payment aggregator (PA) application within 120 calendar days. 

During the quarter-ended December 31, 2022, the company’s net loss narrowed to ₹392 crore as compared to the loss of ₹779 crore in the same period a year ago. The revenue from operations rose 42% year-on-year (YoY) to ₹2,062 crore, driven by an increase in merchant subscription revenues, growth in loan distribution and momentum in the commerce business.