One 97 Communications, the parent company of India’s top digital payments platform Paytm, reported a consolidated net loss of $66.1 million for the quarter ending in March, compared to $20.11 million in the same period last year, due to regulatory hurdles.
For the entire fiscal year 2024, Paytm’s consolidated net loss was $170 million, a decrease from $213 million in FY23. The company, headquartered in Noida, saw its revenue from operations increase by 25% year-on-year to $1.19 billion in FY24. However, higher costs in areas such as payment processing charges, marketing, employee benefits, and software cloud expenses impacted its profitability.
Starting from March 15, India’s central bank restricted Paytm Payments Bank, an affiliated entity of Paytm, from providing several banking services. This led the Noida-based company to establish new banking partnerships to maintain business continuity.
In the January-March quarter, Paytm’s consolidated revenue from operations decreased to $272.3 million.
A significant setback for Paytm was a $27.2 million loss due to the impairment of its investment in Paytm Payments Bank, an associated company.
Despite these challenges, Paytm had approximately $513.8 million in the bank as of March 31. Shares of Paytm dropped by 1.69% on Wednesday to 345.8 Indian rupees, valuing the company at $2.64 billion. Paytm went public in 2021 with 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,” stated Paytm founder and CEO Vijay Shekhar Sharma in the annual shareholder letter.
“This achievement in such a short period was possible thanks to the extensive support from the Regulator, NPCI, Bank partners, and our dedicated team members. The unwavering commitment of our government and regulator to support innovation and financial inclusion keeps us aligned with our mission and committed to our long-term sustainable growth opportunity.”
More to follow.
