Paytm, India’s digital payments pioneer grappling with a regulatory audit of its data management systems, is expected to break even on an operational basis. in the next year and a half.
Paytm, India’s digital payments pioneer grappling with a regulatory audit of its data management systems, is expected to break even on an operational basis. in the next year and a half. The startup is backed by SoftBank Group Corp and Jack Ma’s Ant Group Co. – it also counts Berkshire Hathaway Inc. of Warren Buffett as an investor – predict it will be profitable for six quarters based on operating income before interest, taxes, depreciation, and amortization basis. That forecast comes after gross merchandise value doubled to 2.59 trillion rupees ($34.3 billion) in the three months ended March, the company said in a statement Wednesday.
Listed brand One 97 Communications Ltd., which competes with Walmart Inc.’s Google Pay and PhonePe, gained more than 3% after revealing its prediction. It added an average of nearly 71 million users transacted during the quarter.
Paytm founder Vijay Shekhar Sharma has struggled to win back investor support since the company canceled India’s biggest-ever initial public offering. in November, seen by some as a symbol of India’s growing appeal as a destination for global capital. While the offering raised a record $2.5 billion, shares are down 27% at launch and down more than 70% from their Rs 2,150 crore IPO price.
Investors are increasingly wary of long-term growth prospects and potential regulatory troubles. In March, the central bank banned the company’s lending venture from accepting new customers, citing concerns that it may have shared the data of local users abroad, including with organizations based in China. Paytm has yet to appoint an independent company to audit its operations. The company has lost about 70% of its value since its IPO.
43-year-old Sharma, from the central Indian town of Aligarh, founded One97 about two decades ago and has won nationwide acclaim as a small-town big. But analysts including those at Macquarie Capital Securities (India) Pvt. questioned Paytm’s ability to turn Paytm into a profitable business anytime soon.
