Focus is on payments, distribution of lending products: Paytm founder Vijay Shekhar Sharma

One97 Communications Ltd, which operates under the Paytm brand, will sharpen its focus on payments and distribution of lending products, founder and chief executive Vijay Shekhar Sharma told shareholders, even as he reiterated the company’s target to turn an operating profit by September next year.

Paytm’s core business model is to acquire consumers and merchants for payments services, and upselling them financial services, by leveraging distribution, collections, transactional and behavioural insights, he wrote in a letter to shareholders in its first annual report as a listed company.



Sharma added that its focus continued to be on buy-now-pay-later (BNPL) offerings and helping financial partners leverage credit distribution through mobile payments.

“We have sharpened our focus on payments and distribution of lending products and have prioritised these businesses in our resource allocation ... Our focus is also on showing how creditors can leverage this mobile payments relationship for lending. BNPL, which allows our partner financial institutions to issue credit to consumers at the point of sale, has become a consumer favourite,” Sharma wrote.

He said the company continued to be on track to achieve operating profitability by September 2023. He had written to shareholders earlier in April, stating that it was targeting an operational breakeven by the end of September next year. In his letter in April, he also added that his stock grants would be vested to him only after Paytm’s shares crossed the IPO price on a sustained basis.

On Thursday, the shares ended 0.28% higher at Rs 715.65 on the BSE. The Noida-based company’s IPO price was Rs 2,150 a share.

“I believe that over the past year, our team has done a great job in massively improving our revenues and contribution profits, which allows for investments in our payments and credit businesses while at the same time reducing our Ebitda (operating) losses. We are seeing excellent momentum in our businesses and are on track to achieve operating profitability (Ebitda before ESOP cost) by the quarter ending September 2023,” said Sharma.

For the fiscal year ended March 31, 2022, One97 reported a consolidated loss of Rs 2,396.4 crore, compared with Rs 1,701 crore the year before.

Consolidated revenue, however, grew 65% to Rs 5,264.3 crore from Rs 3,186.8 crore in fiscal 2021, it informed stock exchanges earlier this year. Revenue from operations rose almost 78% to Rs 4,974.2 crore.

Expenses for FY22 totalled Rs 7,601.1 crore. Payment processing charges and employee benefit expenses continued to be two of the major expense line items for the One97 group.