Paytm sees a big boost to its lending business

At a time when the stock of Paytm and all its digital peer group were getting battered in the stock markets, the company has reported a phenomenal growth in its lending business for the first two months of FY23. In fact, Paytm’s lending business has clocked 5.5 million (55 lakh) loan disbursals in April and May 2022. This was reported by the parent company, One97 Communications, which is the holding company which owns and operates the Paytm franchise. Apart from digital payments, Paytm also offers a robust digital lending platform.

For the first two months of FY 23 i.e. April and May 2022, One97 Communications, the company that owns and operates Paytm, reported robust positive growth in the Paytm lending business. In fact, the company witnessed an annualised run-rate of more than Rs23,000 crore for loan disbursements. In addition, one of the core sources of revenues for Paytm, the deployment of devices across various merchant outlets, crossed the 34 lakh deployment mark in the month of May 2022.

Overall, it has been a robust 2 months.
When Paytm reported 5.5 million loan disbursals in the months of April and May 2022, it represented a growth of nearly 471% on a yoy basis. In other words, the lending volumes had scaled nearly 6 times over the same period last year. Paytm has reported that it has till date, disbursed loans amounting to Rs3,576 crore in the months of April and May 2022. Paytm also reported that one very obvious trend in the first two months was that the average ticket size had also increased sharply due to the scale-up of personal loans business.
 

One important metrics for digital companies is the GMV (gross merchandise value). This represents the total merchant payments processed through Paytm Wallet, Paytm Payments bank account, net banking, credit cards,  debit cards and UPI. For the month of May 2022 alone, this business was up by 105% at Rs196,000 crore. Despite these efforts, the company is still making losses and in May 2022 alone, the company reported Rs763 crore net loss for the March 2022 quarter. 

For the time being, Paytm remains a top line revenue play. The revenues from operations were up 89% during the quarter at Rs1,541 crore. In fact, for the full year FY22, Paytm had posted net losses of Rs2,396 crore. For the full year, the revenues from operations for Paytm were up a whopping 77% at Rs4,974 crore. While pushing revenues is the easier part, the tougher part will be the profit boost.