Paytm heading for international shores as its net loss narrows

Bengaluru: Fintech Paytm is getting back on its feet with an international foray to the UAE, Saudi Arabia and Singapore, the company announced on Monday. At the same time, it reported sales dropping for a fourth consecutive quarter in the October-December quarter (Q3) of the ongoing fiscal (FY25).

The newly incorporated companies in the regions will be step-down subsidiaries of Paytm Cloud Technologies Limited, a subsidiary of One 97 Communications Limited, the parent company of Paytm. The incorporation of these wholly-owned subsidiaries will be completed within 6 months.

The initial investment will be up to Rs 20 crore (in one or more tranches) in each subsidiary, the company said in a regulatory filing.

Paytm is exploring various approaches to expand distribution of its merchant payments and financial services stack portfolio developed in India. These include organic expansion via local licenses, strategic investments, and partnerships.

In terms of revenue growth, the company saw a 36% drop in Q3 FY25 from the same period a year ago, amounting to Rs 1,828 crore in the October-December period. This is primarily led by a drop in revenue from marketing services, payment services, and payments and financial services.

Looking at the first nine months of the financial year (9M FY25), the company saw a drop of 35% to Rs 4,989 crore from 9M FY24.

On a sequential basis, however, the company saw a 10% quarter-on-quarter (QoQ) growth in Q3, due to increase in gross merchandise value (GMV), growth in subscription revenues and increase in revenues from distribution of financial services.

The cash balance of the fintech company increased sequentially by Rs 2,851 crore, rising up to Rs 12,850 crore. This has been largely on account of the PayPay stake sale and improvement in working capital, the company said in a statement.

During the quarter, One97 Communications Singapore Private Limited (OCL Singapore) completed the sale of all the Stock Acquisition Rights (SAR) held by it in PayPay Corporation, Japan, for which it received a consideration of Rs 2,372 crore, as against the carrying value of SARs being Rs 1,984 crore.

Net losses in the quarter narrowed to Rs 208 crore, by 6% YoY, another bright spot on the company’s reported earnings. This is largely due to a reduction in expenses by the company.