Paytm shares recovers for second day post weak listing

  • Shares of Paytm rose for a second day on Wednesday, easing a selloff that wiped out about a third of the digital payments startup’s value in its first two trading sessions.
  • Paytm shares had sunk 27% last Thursday, marking one of the worst debuts by a major technology company globally.
  • The market will watch how Paytm will use its strengths to enter into new businesses or create a moat and if it manages to emerge as a leader in a particular business then we can expect buying interest from lower levels otherwise it may take many years to reach its peak valuations, added Meena.
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Paytm CEO Vijay Shekhar Sharma lost $836 million in two days

  • Paytm founder Vijay Shekhar Sharma’s wealth has nosedived more than $836 million after One97 Communications Ltd, the company he has taken public, nosedived 37% in two trading sessions since its market debut.
  • Sharma, who founded the company in 2000, holds a 9.1% stake, or 60 million shares, in Paytm.
  • Paytm said its monthly transacting users also grew by 35% to 63 million in October from 47 million a year ago.
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Paytm shares rise nearly 10% ,after crashing for two straight days

  • Shares of recently listed One 97 Communications, the parent entity of digital payments firm Paytm, climbed nearly 10 per cent on Tuesday after declining for two consecutive days post their listing.
  • The Paytm scrip rose 9.58 percent to end at Rs 1,489.80 apiece on the National Stock Exchange while on the BSE, it climbed 9.90 per cent to settle at Rs 1,494.95 per share.
  • During the intraday trade, the stock had hit a high of Rs 1,525.00 on the BSE and NSE. Over 1.29 crore shares were traded on the NSE during the session while over 11.16 lakh shares exchanged hands on the BSE, data from the respective stock exchanges showed.
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BharatPe CEO said Paytm disrupted the Indian market to return money to Chinese investors.

  • In an interaction with Moneycontrol, Ashneer Grover, whose firm recently got a small finance bank license, said Paytm gave Chinese investors their money back at the cost of the public market.
  • Ashneer Grover has officially criticized Vijay Shekhar Sharma’s decision to “misprice” the fintech firm’s public offering, adding that a failed listing ends the frenzied cycle of IPOs in India.
  • It saw the worst performance in recent history by tanking 27 percent to Rs 1,560 from the issue price of Rs 2,150 apiece.
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Paytm appears as the biggest loser among IPOs listed in a decade, with a 27 percent drop on debut day.

  • It was a black day for Paytm, formally known as One 97 Communications, as the stock crashed 27.25 percent, the biggest-ever fall in a decade for any scrip on the listing day.
  • Paytm registered the biggest-ever loss among IPOs that have been listed in the last 10 years.
  • Paytm has raised Rs 18,300 crore from its public issue, the biggest-ever money raised by any company through IPO in the history of Indian capital markets.
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CEO Vijay Shekhar Sharma tells Investors to hang on after Paytm’s weak listing

  • After a weak listing, Founder Vijay Shekhar Sharma addresses the concerns of investors.
  • The business model that is out there, which is that a payment company can expand to offer credit and other financial services is a model that is definitely out there and proven in many other parts of the world.
  • I would say, hang in there, I have my heart out for you and at the same time, I would like to say our business model is robust and strong.
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Paytm Money introduces ‘Voice Trading,’ an AI-powered service.

  • Paytm Money has launched ‘Voice Trading’, powered by artificial intelligence, allowing users to place a trade or get information about stocks via single voice command.
  • The voice trading feature enables a single voice command, with the use of neural networks and natural language processing to allow instant processing.
  • The platform is rolling out the voice trading feature in beta to select users.
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Paytm hints at Bitcoin offering services if India makes crypto “fully legal”

  • Interestingly, in August last year, Paytm reportedly froze Paytm Payments Bank’s customer accounts, suspecting them of cryptocurrency trading.
  • It is worth noting that the Indian government has been working on a cryptocurrency bill for quite some time.
  • The Reserve Bank of India had banned cryptocurrencies in 2018 but the order was struck down by the Supreme Court in March 2020.
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MediaTek’s Investment Fund, Mountain Capital Invests in Paytm

Paytm has announced today that Mountain Capital will make an investment into Paytm. The deal values Paytm at close to $5Bn.

The fresh capital infusion will allow Paytm, the consumer brand of One97 Communications, to further accelerate and develop a vibrant mobile ecosystem in India encompassing payments, commerce and financial services. 

The proceeds of the investment will be used for expansion and scaling up, boosting payments and commerce and building and launching the proposed Paytm Payments Bank.

Mountain Capital Fund, L.P., one of the investment funds of MediaTek Inc., is focusing on high tech and innovative investments. MediaTek Inc. is a pioneering fabless semiconductor company and a market leader in cutting-edge system on chips (SoCs) for mobile devices, home entertainment, connectivity and IoT products.

“India is an important emerging market with immense potential for smartphone devices, mobile payments, commerce, and financial services. MediaTek’s endorsement on Paytm through Mountain Capital further demonstrates its confidence in the proliferation of India’s digital payments and mobile Internet ecosystem. For Paytm, our mission is to bring half a billion Indians to the mainstream economy and we are happy to have a long term partner in the mobile chipset world to join us. India is ripe for its financial services revolution and with the growing penetration of smartphones, we have an opportunity to give a new business model of payment, banking and financial services combined with online commerce.” [Vijay Shekhar]

Of India’s Changing Ecomm Landscape And Why Paytm Is Better Off Selling Its Marketplace

Now that every Indian ecommerce players have played their card, the biggies like Alibaba, raukaten are turning their focus on India (Alibaba is exploring partnership with Tatas, Rakuten too is planning to launch in India).

What about the Indian players?
Flipkart and others are still in a figuring out mode (okay, that’s over simplification). Both Flipkart and Snapdeal are figuring out the core and will start taking tough decisions in the coming weeks (translates to shutting down categories).

But, what about Paytm?

I think they are totally killing it.

With wallet.

With recharge.

But not with ecommerce marketplace.

I am not talking about GMV growth, but purely the product focus.

Paytm’s MOAT
Paytm is not really a master of logistics or even the marketplace business. Infact, not even close to that! Paytm is largely a technology (integration) play which has strong wallet penetration (+ bank license) to go for the kill.

Case in point : Marketplace without reviews? Do you know that there is no way you can review products on Paytm!! Yeah – you can review a seller but not a product ! So much so for marketplace philosophy!

In an ideal world, you can focus on every piece of the puzzle (and win the world). But in real world, it hardly works.

For Paytm, it’s clear that the wallet business is the NextBigWhat – and ecommerce marketplace, to me was more of an interim solution to keep the valuation flying.

And anyways, why focus on a smaller market (where everyone is bleeding) when you actually win the world (with wallet/bank)?

Why Paytm should sell off its marketplace?

Simply put. It’s not the focus area.

Paytm has very little skin in the game when it comes to marketplace business.

There are buyers who are willing to enter the Indian market and would be willing to buy Paytm’s marketplace business.

The more you delay, the more you expose your ‘lack of focus’ on the product!

As they say, #PaytmKaro.

Wipro To Handle Paytm’s Payments Bank Business

Paytm has partnered with Wipro Limited to create the requisite technology infrastructure for its upcoming Payments Bank business.

Wipro will be implementing the core banking solution for Paytm and also programme managing the integration of other key systems like the anti-money laundering solution and the regulatory reporting solution.

Wipro will play a crucial role in helping Paytm interface its existing systems with the core banking solution. It will also put in place and manage the data centers for the Payment Bank in order to ensure smooth functioning of the new unit.

Shinjini Kumar, CEO Designate – Paytm Payments Bank said, “Technology is an integral part of the value proposition we seek to create for customers of our upcoming bank and we are happy to announce that we will be partnering with Wipro. They have a demonstrated track record in banking technology in India that will be important in ensuring that our innovative solutions are integrated with core banking systems in a compliant and secure manner, creating the right platform for service delivery at large scale. We are a young and agile organization and the Wipro team has demonstrated the agility and flexibility that will be necessary to make this partnership meaningful.”

Paytm received its in-principle approval to set up a Payments Bank in August last year. Payment banks can accept demand deposits and savings bank deposits from individuals and small businesses, up to a maximum of Rs 1 lakh per account.

Paytm’s Attempt To Block Unicommerce Fails In Court

The legal tussle between Unicommerce and Paytm continues. Now Snapdeal-owned Unicommerce in a statement said that all interim injunctions sought by Paytm were denied by the Delhi high court.

However, Paytm’s statement clearly said court asked Unicommerce not to use any data which it accessed from the sellers of Paytm.

Unicommer’s statement said, “Paytm’s plea to restrain Unicommerce from using the word “paytm” was denied. Unicommerce was held free to use the word paytm in normal font, should it so desire.”

Unicommerce confirmed in court that it had discontinued the usage pf Paytm’s logo and also claimed that it has removed the logo from an old video which Paytm had shown in court.

The statement further added, “Paytm’s plea to restrain Unicommerce from accessing information derived from its sellers was denied. The Court found no reason to change the status quo of Unicommerce accessing the seller data as a representative of the seller and making such data available back to them. Unicommerce clarified in Court that the seller data is accessed with the consent of the sellers in order to help the sellers improve their business and it does not use it for itself.”

Paytm had filed a lawsuit against Unicommerce in Delhi high court for accessing confidential data via the sellers who use Unicommerce’s platform.

Later, Paytm has also asked its sellers to refrain from using Unicommer’s platform and ‘strict action’ will be taken which will include ‘imposing penalties’ or ‘blocking the concerned partner entirely’ or more.

Delhi High Court Orders Snapdeal-owned Unicommerce Not To Use Paytm’s Data

The Delhi High court has asked Snapdeal-owned Unicommerce not to use any data which it from accessed from the sellers of Paytm.

Paytm’s statement said, “Unicommerce has been instructed not to access the customers’ data and the sellers data which was being used to sign up sellers for our competition. They have also  submitted that they will not derive any information such as sales analysis or user behaviour for any misuse. This is an important point since this data might have been used unduly by our competition.”

It further added, “The order clearly states that sellers can only view this information and they cannot submit anything back such as catalogue information, inventory, pricing or create any order processing changes or catalogue changes in our systems. This effectively prevents any changes from happening into Paytm data and systems.”

The court also asked Unicommerce to pull down its YouTube advertisement or remove Paytm’s logo from it.

However, Unicommerce said, “The reliefs sought (by Paytm) have not been granted. We welcome the honourable court’s interim order. While the matter is sub-judice, we believe that the allegations made are clearly unfounded and speculative.”

Through a blog post, Paytm has asked its sellers not to use Unicommer’s platform and ‘strict action’ will be taken which include ‘imposing penalties’ or ‘blocking the concerned partner entirely’ or more.

The case will next be heard on July 11th.

Earlier, Alibaba backed Paytm had filed a lawsuit against e-commerce management software Unicommerce and accused of accessing confidential data via the sellers who use Unicommerce’s platform for managing their orders and inventory for other marketplaces as well.

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Marketplace Tussle: Paytm Takes Snapdeal-Owned Unicommerce To Court For Stealing Data

Alibaba-backed Paytm has filed a lawsuit against e-commerce management software Unicommerce, which is owned by Snapdeal.

Paytm has accused Unicommerce of accessing confidential data via the sellers who use Unicommerce’s platform for managing their orders and inventory for other marketplaces as well.

The hearing is likely to take place on Thursday in Delhi High Court.

Paytm declined to comment and said no statement has been given by the company so far.

As the competition between e-commerce marketplaces intensify and customer acquisition gets tougher, rival companies are leaving no opportunity. Snapdeal had initially started as an e-commerce marketplace and then acquired Freecharge and forayed into the payment space while Paytm though started as a payments platform, later entered the marketplace business.

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Paytm Clocks 200% Growth In Utilities And Bill Payments Segment

With utility vertical comprising electricity, water, telephone and gas bill payments, Paytm plans to do a GMV of Rs 12,000-13,000 crore by tapping this lucrative space.

The recently launched utilities and bill payments segment of Paytm is already witnessing a massive growth of 200% month on month, claims the company. The overall addressable size of this market is Rs. 75,000 crore.

The company has tie-ups with around 30 power & water distribution companies and by the end of the next quarter it seeks to double this number. The expansion will also cover state water distribution and piped gas boards so that an increased number of customers pan-India can enjoy the convenience of paying their bills quickly on Paytm app & website.

Paytm is looking to expand its customer base from the present 120 mn to 500 mn by 2020. Last month, the company clocked around 2.5 million transactions in this segment.