Paytm counts costs of regulatory clampdown as losses swell

One 97 Communications, the parent company of India’s leading digital payments platform Paytm, widened its consolidated net loss to $66.1 million in the quarter ending March, compared to a loss of $20.11 million in the same quarter last year as it grappled with a regulatory clampdown.

For the full fiscal year 2024, Paytm’s consolidated net loss stood at $170 million, down from $213 million in FY23. The Noida-headquartered company’s revenue from operations grew 25% year-on-year to $1.19 billion in FY24, though increased expenses across payment processing charges, marketing, employee benefits and software cloud costs weighed on its bottom line.

India’s central bank barred Paytm Payments Bank, an associate firm of Paytm, from offering many banking services starting March 15, a move that forced the Noida-headquartered firm to ink new partnerships with banks for continuity of many of its businesses.

Its consolidated revenue from operations fell to $272.3 million in the January-March quarter.

A major blow to Paytm during the quarter was a loss of $27.2 million on impairment of its investment in associate company Paytm Payments Bank.

It still had about $513.8 million in the bank at the end of March 31. Shares of Paytm fell by 1.69% on Wednesday to 345.8 Indian rupees, giving it a valuation of $2.64 billion. Paytm went public in 2021 at a valuation of $20 billion.

“I am happy to share that we have successfully transitioned our core payment business from PPBL to other partner banks. This move de-risks our business model and also opens up new opportunities for long-term monetization, given our platform’s strength around customer and merchant engagement,” said Paytm founder and CEO Vijay Shekhar Sharma in the annual shareholder letter.

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“It has been possible in such a short period of time with extensive support from the Regulator, NPCI, Bank partners and our committed team mates. The unwavering commitment of our government and regulator to support innovation and financial inclusion, keeps us true to our mission and committed to our long-term sustainable growth opportunity.”

More to follow.

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