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One97 Communications, which owns Paytm brand, on Wednesday said that its loan disbursements grew 327 percent in January 2023 to ₹3928 crore against ₹921 crore during the same period last year. The number of loans disbursed for the month under review grew 103 percent to 3.9 million (1.9 million).
“Our loan distribution business (in partnership with top lenders) continues to witness an accelerated growth with disbursements through our platform growing 327 per cent y-o-y to ₹3,928 crore ($480 million),” Paytm said in its operating performance update filed with the stock exchanges on Wednesday.
The total merchant Gross Merchandise Value (GMV) processed through the Paytm platform for the month of January 2023 aggregated to ₹1.2 Lakh crore ($15 billion), a 44 percent growth to ₹0.83 lakh crore GMV in same month last year.
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Paytm sees continued expansion of consumer base with average monthly transacting users (MTU) for January 2023 at 89 million, up 29 percent year-on-year over 69 million in same month last year. The number of merchants paying subscription for payment devices has reached 6.1 million, an increase of 0.3 million in the month.
This operating performance update for January 2023 came on the heels of Paytm reported operating profitability in the December 2022 quarter, three quarters ahead of its earlier guidance of achieving this target by the September 2023 quarter.
Macquarie Research
Meanwhile, analysts at Macquarie Research have given a double upgrade on One97 Communications to “outperform” from “underperform” and also raised the target price of the share to ₹ 800.
“The biggest surprise is distribution business, control of cashbacks, opex,” Macquarie said in a note on February 8. The report also flagged risks of adverse cycle in retail segment, competition and regulations.
In particular, the Macquarie Research report highlighted that a lot more needs to be done on corporate governance by getting an independent non executive chairman, more independent members on the board etc.
The Macquarie report also said that many Buy Now Pay Later (BNPL) models have failed across the world, including in India. Although Paytm does not carry any balance sheet risk on the loans originated, it carries significant business and reputational risk, the report said. A few months of bad performance could result in lenders withdrawing their credit lines, significantly affecting Paytm’s ability to grow, the Macquarie report noted.
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