Paytm Bank Revenue Soars: Rs 729 Cr in FY18
Paytm, an Indian e-commerce payment system and digital wallet company, has seen a rapid financial evolution in recent years. Although the company suffered substantial losses in the previous fiscal years, it soon regained its prominence and stability in the market.
According to the latest reports by the Ministry of Corporate Affairs (MCA), Paytm earned a revenue of Rs 2.47 crore worth of revenue in its first seven months from 22 August 2016 to 31 March 2017, which shot up to a figure of Rs 729.1 crore in the financial year 2018. Out of 729.1 crores, the company received 650 crores via commission, brokerage, exchange, and earnings from wallet utilisation. All the deposits received by the bank are invested in government securities.
But later in the year, it incurred a heavy expenditure of 740 crores wherein the losses amounted to Rs 20.7 crores for that period. This was indeed a turning point in Paytm’s business operations. But the company showed a significant amelioration in its growth ever since.
Paytm’s major source of revenue comes from mobile wallet Paytm and its banking arm Paytm Payments Bank, which was established during the 2018 fiscal. With over 300 million users, Paytm is the biggest competitor in the digital wallet space and has witnessed a tremendous rise in its business post demonetisation in November 2016.
The Paytm Expedition
With users over 126 million, Paytm entered into key tie-ups in the previous years with IRCTC, SpiceJet and Mumbai Metro during the last financial year. It also launched in the education category. The Gross Merchandise Value (GMV) increased 46% to Rs 717 crore in June 2015 compared with Rs 491 crore in March 2015. The number of wallets doubled to 85 million in June 2015 from 41 million in March 2015. Marketplace orders increased to 1.35 million in June 2015 from 780,000 in March of the same year. During 2015-16, the company’s gross merchandise value (GMV) was estimated at $3.1 billion.
Well, later last year, Paytm raised $200 million in funding from the Alibaba Group affiliate Ant Financial. In the financial year 2014, the company reflected a profit of Rs 5.6 crore against a revenue of Rs 210 crore.
Apart from these Paytm, which currently reaches to approximately 39,000 pin codes across the country, is adding more sellers in the tier-II and tier-III cities and beyond. The company also received RBI approval in August last year to set up a payments bank. It had last year set aside
$250 million for the payments banking business. It also aims to recruit around 3,000 people for the new business unit.
Recently, Paytm has ventured into a wide variety of business sectors including entertainment, hotel, air and train ticket bookings, gold investments to mutual funds. The company also revealed that its main focus would be to offer numerous investment instruments and wealth management services through its Paytm Money app this year.
Vijay Shekhar Sharma, the founder of Paytm has however separated the payment and e-commerce business under Paytm and Paytm Mall respectively. The company has recently raised close to $356 million from Warren Buffett’s Berkshire Hathaway at a valuation of $12 billion.
When compared with Airtel Payment Bank which earned a revenue of Rs 160 crore in the financial year 2018, and losses worth Rs 272 crore, the figures of Paytm look further imposing. But with regards to the total deposits, Airtel already has the advantage over Paytm as Airtel Payments Bank and Fino Payments Bank have the permission to add more customers unlike Paytm, but the situation is likely to change in the coming year. Satish Kumar Gupta, the third CEO of Paytm Payments Bank said that Paytm is sure to show a massive rise in its revenue in the year 2019. Let’s wait and witness as to what the coming year holds for Paytm!