Going by the RBI directive and the overall narrative, Paytm may have lost the rigour of stress tests, audits and compliance.
Paytm operator One97 Communications Ltd on Wednesday said it is not in talks to sell a stake to the Adani Group. Adani group has also termed such reports as "false and untrue." Commenting on a report that billionaire Gautam Adani was in talks with Paytm CEO Vijay Shekhar Sharma for a possible stake buy, One97 Communications said, the "news item is speculative and the company is not engaged in any discussions in this regard."
Many high-profile IPOs in India since 2021 have destroyed investor wealth due to overvaluation, weak business models, and post-listing disinterest, turning 1 lakh investments into as little as 3,500.
It's mid-morning and the two-kilometre stretch from Rashbehari Avenue to Gariahat Market is bustling with activity. Dotted with saree shops and hawker stalls that sell everything, from hairpins, hangers and towels to hosiery, mobile phone covers and kurtas, this is one of South Kolkata's busiest shopping areas. And it is beginning to wake up to the Paytm crisis.
The Reserve Bank of India (RBI) has barred Paytm Payments Bank from most operations, including taking deposits and fund transfers with effect from March 1, 2024. The curbs on the bank come amid several alleged failures such as violations of know-your-customer (KYC) norms. Under such a scenario, here's what works for customers using Paytm Payments Bank, according to the company.
Fintech firm One97 Communications, which owns Paytm brand, on Friday said its loss has widened to Rs 840 crore in the quarter ended June 30, primarily due to continued impact of restrictions on Paytm Payments Bank Ltd. The company had posted a loss of Rs 358.4 crore in the same period a year ago, according to a regulatory filing by the company. The consolidated revenue of Paytm declined 33.48 per cent to Rs 1,639.1 crore during the reported quarter, from Rs 2,464.2 crore in the same period a year ago.
Online food delivery platform Zomato will acquire Paytm's entertainment ticketing business for Rs 2,048 crore to strengthen its "going-out" segment in a deal that will help the troubled fintech firm to sharpen its focus on core payments and financial services distribution.
Fintech firm One97 Communications, owner of Paytm brand, is laying off an undisclosed number of employees and claimed that it is providing outplacement support for their smooth transition, according to a company statement. Paytm's sales employee headcount in March 2024 quarter dropped by about 3,500 to 36,521 personnel on a quarter-on-quarter basis, mainly due the impact of the Reserve Bank of India's ban on services of Paytm Payments Bank.
Fintech firm One97 Communications, which owns the Paytm brand, has received support from merchants, and it assured them of continuity of services without any disruption, the company said in a blog on Sunday. The blog post came amid the recent crisis around Paytm Payments Bank Limited (PPBL), an associate company of Paytm, which has been barred by the RBI from accepting deposits or top-ups in customer accounts, wallets, FASTags and other instruments after February 29.
Has Vijay Shekhar Sharma given up on the bank? For now, he seems to be on a save-OCL mission. The bank will face its logical end, observes Tamal Bandopadhyay.
Shares of One97 Communications (OCL), which provides financial services under the brand 'Paytm', and has a banking arm Paytm Payments Bank (PPBL), hit the 5 per cent upper circuit at Rs 428.10 on the National Stock Exchange (NSE) in Monday's (February 26) intraday trade. The up move in the stock on Monday came after the Reserve Bank of India (RBI) asked the National Payments Corporation of India (NPCI), in post stock market hours, to look into the possibility of migrating PPBL customers, using the UPI handle '@paytm', to four-to-five other banks.
The National Payments Corporation of India on Thursday granted approval to Paytm-owner One97 Communications Ltd to participate in UPI as a Third-Party Application Provider (TPAP) under the multi-bank model. Axis Bank, HDFC Bank, State Bank of India, and YES Bank will act as Payment System Provider (PSP) banks to Paytm.
Fintech firm One97 Communications, which owns the Paytm brand, on Wednesday said its loss in the fourth quarter of the financial year 2023-24 has widened to Rs 550 crore following the ban imposed by the RBI on transactions related to its payments bank. The company had posted a loss of Rs 167.5 crore in the same period a year ago, the company said in a regulatory filing. "Our fourth quarter FY24 results were impacted by temporary disruption on account of UPI transition etc. and permanent disruption because of the PPBL embargo.
Beleaguered Paytm Payments Bank's managing director and CEO Surinder Chawla has resigned from the company, a regulatory filing said on Tuesday. Chawla's resignation comes amidst Paytm Payments Bank facing prohibitory action from banking regulator RBI. "Surinder Chawla, managing director and CEO of PPBL, has tendered his resignation on April 8, 2024, on account of personal reasons and to explore better career prospects.
Reserve Bank of India on Friday said NPCI has been asked to examine the possibility of it becoming a third party application provider for continued UPI operations of the Paytm app. The central bank has barred Paytm Payments Bank from accepting further credits into its customer accounts and wallets after March 15, 2024.
Payments banks have urged the Union finance ministry to increase their deposit limit for each account to Rs 5 lakh, according to a source who participated in a meeting, chaired by the Department of Financial Services Secretary M Nagaraju, in New Delhi. At present, they can accept deposits of up to Rs 2 lakh.
Fintech firm One97 Communications -- owner of the brand Paytm -- has shifted its nodal account to Axis Bank from Paytm Payments Bank. The move will allow continuity of Paytm QR, Soundbox, card machine after the March 15 set by the Reserve Bank of India (RBI), as per a regulatory filing. The RBI has advised customers and merchants of Paytm Payments Bank Ltd (PPBL) to shift their accounts to other banks by March 15, giving 15 more days to the beleaguered entity to close most of its operations, including deposit and credit transactions.
Vijay Shekhar Sharma has stepped down as part-time non-executive Chairman of Paytm Payments Bank Limited (PPBL), and the board of the bank has been reconstituted. The Reserve Bank has barred the PPBL from accepting deposits and credits from any customer post-March 15 for persistent non-compliances and continued material supervisory concerns in the bank. PPBL has reconstituted its Board of Directors with the appointment of Ex-Central Bank of India chairman Srinivasan Sridhar, retired IAS officer Debendranath Sarangi, former executive director of Bank of Baroda Ashok Kumar Garg, and former IAS officer Rajni Sekhri Sibal, Paytm said in a regulatory filing on Monday.
As many as 80-85 per cent Paytm wallet users will not face any disruption because of regulatory actions, and the remaining users have been advised to link their apps to other banks, RBI Governor Shaktikanta Das said on Wednesday. The Reserve Bank of India on January 31 barred Paytm Payments Bank Ltd (PPBL) from accepting deposits, credit transactions, or top-ups in any customer accounts.
'We went from zero to about 10 million users in three months. Paytm came out with the wallet play and we came out with the UPI play.'
Digital payments provider Paytm is all set to make its market debut as early as this year, with an aim to raise $3 billion (around Rs 22,000 crore). If successful, this could be the biggest initial public offering (IPO) by an Indian company, breaking Coal India's 2010 record of Rs 15,475 crore. According to media reports, the board of One97, parent company of Paytm, is all set to meet this Friday to formally approve the IPO plan.
At a time when the role of corporate boards is once again under the scanner, independent directors on the Paytm Payments Bank board have indicated that red flags were raised over regulatory issues but they may have been late in doing so. "As independent directors, we asked questions and monitored responses to the Reserve Bank of India (RBI). Many changes were made on compliances. "Obviously, in retrospect, it was not found to be enough," said one of the independent directors on the condition of anonymity.
Investors of online brokerage house Zerodha on Monday said its users might face some problem while executing sell orders due to "an issue" related to depository CDSL. It tweeted, "You may face an issue with authorizing the sale of your stocks due to an issue with CDSL. "We are in touch with CDSL to have the issue resolved at the earliest."
Following the Reserve Bank of India's (RBI's) action against Paytm Payments Bank, participants in the fintech ecosystem have turned their attention to giving priority to compliance with regulatory norms. Fintech industry players say the episode will ensure adherence to such measures. Executives Business Standard spoke to said companies should have clarity on their requirements.
As it readies for its initial public offering (IPO) later this year, digital payments firm Paytm is honing its strengths to remodel itself from being a payment wallet to becoming a financial services provider, and is working towards narrowing its losses, evident from its most recent Annual Report. Unlike many of its peers, Paytm has started expanding its merchant payment ecosystem. It has realised that though it can take the maximum share of the Unified Payment Interface (UPI) transactions, from a revenue generation point of view it will not have any impact.
Digital payments and financial services firm Paytm is likely to allocate shares at the upper price band of Rs 2,150 apiece on November 16 after market regulator SEBI's approval which is expected to come on Monday, sources aware of the development said. Earlier the allocation was expected to take place on Monday and the Paytm Money app also displayed the same.
Price Waterhouse Chartered Accountants (PwC India) has resigned as the auditor of Paytm Payments Services, the fintech major said in a regulatory filing on Monday. "...we wish to inform you that M/s. Price Waterhouse Chartered Accountants LLP ... statutory auditors of material subsidiary i.e. Paytm Payments Services Limited (PPSL) have resigned with effect from August 7, 2023," the company added. Paytm said that the statutory auditors had not raised any concerns or issues and that the company had noted PwC's resignation.
The Chinese financial giant, which had invested in One 97 Communications since 2015, has seen a sharp decline of 45 per cent, or Rs 2,125 crore, in its stake value since the Reserve Bank of India (RBI) took action against Paytm Payments Bank on January 31. One 97 shares closed at Rs 422.6 a share on Monday. The Chinese company, however, had sold its stake worth Rs 8,293 crore in three tranches over one year.
The growth in personal loans for fintech major Paytm may remain muted in the future and not replicate a three-digit year-on-year (Y-o-Y) growth that it recorded in the previous years, a person familiar with the matter said. Sources said the personal loans book may grow in the range of 30 to 40 per cent Y-o-Y on its current base. On a quarter-on-quarter (Q-o-Q) basis, the number of personal loans the Noida-based fintech company disbursed has dropped 20 per cent from 0.3 million in the first quarter of this financial year (Q1FY24) to 0.24 million in Q2FY24, according to regulatory filings.
The RBI on Wednesday barred Paytm Payments Bank Ltd from accepting deposits or top-ups in any customer account, prepaid instruments, wallets, and FASTags, among others after February 29, 2024.
Sources close to the development told Business Standard the company was exploring different ways to save on its employee costs and had laid off a few employees on "performance" grounds. "We will see a similar development for the next few months. "The company is fine-tuning its hiring policies and implement rigourous measures to look into employee performance," a source said.
'We now understand things that we have to correct.'
Start-ups don't care that mad-money funding comes to a hard stop after an IPO, observes Debashis Basu. As a listed entity, corporate actions have to take the interests of all shareholders, especially minority shareholders, into account. So far, we are not seeing any sign of it, observes Debashis Basu.
Investors are increasingly turning optimistic about shares of new-age companies. From broad-based 'sell' calls, analysts are giving thumbs up to Zomato, Paytm, and FSN e-Commerce Ventures-owned Nykaa as these companies have shifted focus to sustainable profits. The shares of Zomato hit a fresh 52-week high of Rs 126 apiece on the BSE on November 7, having rallied 15.4 per cent in one week.
Paytm's pre-IPO investors, which include likes of Warren Buffet's Berkshire Hathway, SoftBank and Alibaba, do not seem to be in a hurry to exit India's leading digital payments brand as they continue to believe in its long-term prospect, analysts said. On Tuesday, 86 per cent of Paytm's shares became free to trade after the end of the lock-in period, allowing investors to sell shares that haven't yet been allowed onto the market. Market participants have been speculating on Paytm, post-expiry of lock-in for pre-IPO investors.
After new-age tech companies reported better-than-expected June quarter (Q1FY23) results, analysts said it will be a long road to recovery for their respective businesses and the stock prices. Moreover, brokerages differ on whether it is the right time to own these stocks. The common thread, however, that runs across most brokerages is Zomato, where they suggest buying the stock with the one-year target price ranging between Rs 60 - 115, translating into an upside of around 9 - 109 per cent from the current levels. The company's gross order value (GOV) of food delivery jumped 10 per cent quarter-on-quarter (QoQ) and 42 per cent year-on-year (YoY) in Q1, aided largely by growth in volume, and mild growth in average order value (AOV) at 1-2 per cent. The company also broke even on an adjusted Ebitda basis during the quarter.
The RBI on Friday gave 15 days more till March 15, 2024 to Paytm Payments Bank Ltd (PPBL) to stop deposits, credit transactions or top-ups in any customer accounts, wallets, and FASTags, keeping in view the interest of customers, including merchants. As per a January 31 order of the central bank, PPBL was asked to stop further deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and National Common Mobility Cards, after February 29.
Paytm CEO Vijay Shekhar Sharma said on Wednesday that the company's share market performance has been in line with that of global peers in the sector over the past six months due to macroeconomic factors. "Macro factors like quantitative easing, free money due to US monetary policy and other parameters led to a spook in the market in terms of pricing the IPO. "Paytm's shares have received a similar response to that of global peers in the last six months...But that is not a complete reasoning.
Even if the Paytm fiasco does not mark the end of the bull run, at least some sanity will return to the wild IPO market, observes Debashis Basu.
According to its DRHP filed in 2010, the company's net worth was just Rs 140 crore. Its total income for the financial year 2009-10 stood at Rs 119 crore and it had a net profit of Rs 16 crore. In sharp contrast, at the end of March 2021, Paytm's networth was Rs 6,535 crore and total income stood at Rs 3,187 crore.
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