Paytm’s Vijay Shekhar Sharma sets $1 billion free cash goal, sees fintechs gaining lending share

Paytm founder Vijay Shekhar Sharma has set a $1 billion free cash flow generation milestone for the company and expects fintechs’ share of the lending market to more than double as the overall market expands, signalling a sharper focus on returns, compliance and credit-led growth.

“I have told my team that my commitment to the company is to have $1 billion of free cash flow, irrespective of whether it takes 3 or 4 years. That milestone remains my commitment,” Sharma said at the 22nd Motilal Oswal Annual Global Investor Conference in Mumbai.

Sharma described billion dollars in free cash generation as the personal benchmark that would complete “phase one” of his life. He defined free cash as the money left after net profit and capital expenditure, putting cash generation, not merely accounting profit, at the centre of the company’s next phase.


The target comes with a stricter allocation discipline. Sharma said the company should exit businesses that consume energy and resources without producing a return, and concentrate creativity where it can see a bottom line in a large market.

“Wherever you can see a bottom line, focus there,” he said.

He declined to defend Paytm’s market capitalisation when asked how much wealth the company could create over the next five to 15 years. “I will not be able to justify the market capitalisation—today’s, yesterday’s or tomorrow’s,” Sharma said. “But I can certainly talk about how much substance, masala, gravy and juice there is in the company’s business.”

The second pillar of his outlook is the lending market, which is growing at about 15% and could potentially reach Rs 400 lakh crore in 5 years. Sharma said the market could double in four to five years as the economy, demand for credit and lendability increase.

“My belief is that when the market doubles, fintechs’ market share will more than double,” he said. Addressing the market differently, while remaining compliant and generating cash, would give fintechs a further advantage, he added.

Sharma said technology companies’ first principles approach allows them to create markets that traditional financial institutions may not serve. Daily collections on merchant loans, for example, can lower risk for lenders while opening credit access for merchants, he said.

But that technology advantage is now being paired with a markedly different approach to regulation. Sharma acknowledged that technology companies initially entered financial services without fully appreciating regulatory obligations.

“Fintech is no longer merely a technology company,” he said. “In the regulator’s eyes, the fintech ecosystem has matured beyond being a technology sector. It is a financial subsystem.”

He compared the sector’s evolution to moving from adolescence to adulthood, saying regulation and compliance had become first principles. Paytm now discusses proposed products with regulators before introducing them, reversing the earlier practice of launching first.

“Now we work in sync with the regulator,” Sharma said. “We first go to the regulator, explain what we plan to do, and then launch it in the market.”

Sharma also framed merchant payments as a business that can grow without relying on merchant discount rate revenue, incentives or grants. He said Paytm had realigned its business around “zero MDR, zero incentives and zero grants,” and remained confident that its committed growth and profit trajectory could be sustained on that basis.

Any MDR revenue would provide additional upside. “MDR would be icing on the cake—or the cherry on the cake—when it comes to profit,” he said. Sharma added that questions remained over how MDR might apply across small and large merchants and different transaction sizes.

Paytm’s revived Postpaid business is another potential growth lever, though Sharma said it would be scaled cautiously. The company had paused the product in December 2024 after previously disbursing Rs 3,000 crore a month. Current disbursements are in the hundreds of crores, he said.

“I have moved into the ‘slow and steady’ category,” Sharma said. “Slow and steady wins the race.”

Paytm is now working with banks on the product, after previously partnering with non-bank lenders. Banks offer a “dramatically lower” cost of capital and support a larger loan book, Sharma said.

He described Postpaid as lending restricted to payments, with dynamic limits informed by customer behaviour such as electricity-bill payments and spending patterns. The product is designed as a salary advance, with loans below Rs 60,000, rather than for consumers regularly spending Rs 50,000-Rs 60,000 a month, he said.

Sharma also argued that India’s payments model has become an exportable template. He recalled the Indonesian prime minister telling him that the country had adopted a “Paytm model,” which the finance minister described as merchants accepting payments through QR codes.

“The world looks up to India for solving payments for small businesses, reducing the cost of payments, and addressing the credit-access problem,” Sharma said.

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