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Paytm Q3 update: lending business grows 401% YoY, stock hits all-time low

Paytm, the publicly listed Fintech firm has released its operating performance for the December quarter of the fiscal year 2021-22, claiming “stellar growth combined with scale-up of lending business and devices” during the reporting period.

Paytm logo displayed on a phone screen is seen in this illustration photo

Image Courtesy: Jakub Porzycki

The Noida-based company reported 4.4 million loan disbursals, a 401 percent increase year on year, with loans totaling Rs 2,180 crore disbursed in the quarter, up from Rs 470 crore in the same period last year. Paytm further noted that all lending was done in collaboration with banking institutions and non-banking financial companies (NBFCs), claiming that no FLDG was offered to any lender for their lending operation. FLDG, or First Loss Default Guarantee, is an agreement in which a third party promises to reimburse a lender if the borrower defaults.

Paytm has also improved its online payments business with the rollout of 2 million devices, according to the company. The overall number of devices distributed across Paytm’s merchant base has expanded from 900,000 on June 30, 2021, to around 1.3 million in September 2021, to the current figure.

In the third quarter, user engagement jumped by 37 percent year on year, with 64.4 million average monthly transacting users (MTU). The company’s gross merchandise value touched Rs 2.5 lakh crore. In comparison, the previous quarter’s GMV was around Rs 1.9 lakh crore.

During the same period previous fiscal year (FY21), the fintech major generated Rs 663.9 crore in operational revenue. Its net losses increased by 8.42 percent to Rs 473.5 crore during the July-September quarter, up from Rs 436.7 crore the previous year. In a regulatory filing, the digital payments company addressed the revenue increase to a 52 percent increase in non-UPI payment volumes (GMV) and a more than three-fold increase in financial services among other revenue.

Paytm’s statement comes as its shares plunged nearly 6 percent to a fresh 52-week low of Rs 1,152 on Monday. The shares dipped when brokerage Macquarie slashed its target price on the digital payments provider to Rs 900 per share, down from Rs 1,200 per share previously.

Paytm’s parent company, One97 Communications Ltd, managed to raise $2.5 billion from its IPO, but a 27 percent drop in its 18 November listing created it one of the worst opening showings by a major technology company since the late 1990s dot-com bubble. Paytm’s shares have plummeted almost 38 percent since its disastrous IPO, and the company has significantly underperformed the Nifty index.

Source: Paytm Operating Performance Report

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