Paytm Q3 gross merchandise value up 123%

Paytm, a digital payment and ecommerce company, on Monday reported a gross merchandise value (GMV) of Rs 2.5 lakh crore for the quarter ended December 31, 2021 (Q3FY22), up 123% from Rs 1.12 lakh crore reported in the corresponding quarter of last year (Q3FY21).

Its lending business also registered tremendous growth as it disbursed as many as 44.14 lakh loans in Q3FY22, five times the loans disbursed in Q3FY21 (8.81 lakh), the company stated in a regulatory filing.

The value of the loans disbursed in the quarter grew to Rs 2,180 crore, as against Rs 470 crore in the corresponding period last year.

Paytm clarified that all the lending was done in partnership with banks and non-banking financial companies (NBFC), and no FLDG was given to any lender for their lending business. FLDG, or First Loss Default Guarantee, is an arrangement wherein a third party guarantees to compensate a lender if the borrower defaults.

The company also reported a 63% growth in the average monthly GMV per unique user from Rs 7,934 to Rs 12,950. This figure represents the total value of transactions done by each monthly transacting user or unique user with at least one successful transaction in a particular calendar month.

The company’s shares fell by 6% and closed at Rs 1,157.90 on the BSE after Macquarie, a financial services company, in its report on Monday reduced Paytm’s target price (TP) by ~25% to Rs 900.

Macquarie cut its revenue projections for FY22-26E and compounded annual growth rate from 26% to 23%.

In its report, it stated RBI’s proposed regulations around capping wallet charges and senior management attrition as some of the challenges faced by the company.

Since the payments business forms 70% of
overall gross revenues for PayTM, any regulations capping charges could impact revenues significantly, it added.

While the report also pointed that PayTM’s average ticket size for loans disbursed has been falling since Q1FY21, the quarter ending December 31, 2021, rose 11.36% over last quarter to Rs 4,938.83.