Shares of Paytm, the parent company of One 97 Communications, rallied over 4% in opening trade on the Bombay Stock Exchange (BSE) on Monday as investors reacted to the fintech major’s strong growth in payments and loan distribution business. The stock price has gained 20.5% in ten out of eleven sessions after the payment solutions company launched share buyback at a significant premium of 50% as compared to the current market price. The company launched a share buyback scheme worth ₹850 crore at ₹810 apiece on December 21, which represents 1.62% of the paid-up share capital of the company as of March 31, 2022.
On Monday, Paytm share price opened 2.8% higher at ₹566.20, against the previous closing price of ₹550.70 on the BSE. During the session so far, the stock gained as much as 4.2% to hit a high of ₹574, driven by strong volume trade. The market capitalisation (m-cap) of the company stood at ₹37,012 crore. Meanwhile, the BSE Sensex was trading 590 points higher at 60,489 levels.
In the quarterly business update, Paytm said that it reported sustained growth in payments and loan distribution business by disbursing ₹3,665 crore ($443 million) worth of loans in the month of December, up 330% on yearly basis. The total disbursements for the three months ended December 2022 stood at ₹9,958 crore, a growth of 357% YoY. The number of loans grew 117% YoY to 0.37 crore for the month of December, and 137% YoY to 1.05 crore cumulative loans for the three months ended December 2022.
The payment solutions company has also reported consistent growth in merchant payments volume, with the total Gross Merchandise Value (GMV) processed through its platform rising by 38% YoY to ₹3.46 lakh crore ($42 billion) for the quarter ended December 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,” it said.
The Paytm Super App also witnessed growth in consumer engagement with the average monthly transacting users (MTU) climbing 32% YoY to 8.5 crore during the quarter under review. The fintech major said that the number of merchants paying subscriptions for payment devices has reached 0.58 crore as of December 2022, an addition of 0.1 crore devices in Q3 FY23.
In a separate development, Paytm Payments Bank has received receipt approval from the Reserve Bank of India (RBI) to appoint Surinder Chawla as its Managing Director and CEO. The appointment has been approved by the central bank for a period of three years. “Chawla brings with him an illustrious career in Retail Banking spanning over 28 years across marquee institutions such as HDFC Bank, RBL Bank, ABN Amro Bank, and Standard Chartered Bank,” the company said in the exchange filing.