Paytm founder pledges profitability and regulatory compliance at AGM
Paytm's founder, Vijay Shekhar Sharma, has emphasized the company's commitment to achieving profitability and meeting regulatory compliance during its Annual General Meeting (AGM) on Thursday. "I want to re-state that instead of talking about EBITDA before ESOP, I want to talk about PAT (profit after tax). We want to commit to PAT profitability," Sharma stated at the AGM. This marks a shift from the company's earlier focus on rapid user acquisition and growth.
Paytm's financial performance and regulatory challenges
Despite Sharma's earlier assurance to analysts in July about achieving EBITDA profitability pre-employee stock option costs, Paytm continues to grapple with financial challenges. The company reported a net loss of ₹840 crore in the June quarter, following a ₹550 crore net loss in the March quarter of FY2024. Additionally, it has faced regulatory issues with the Reserve Bank of India (RBI) suspending its banking activities earlier this year.
Paytm's commitment to compliance amid regulatory action
Sharma assured investors at the AGM that Paytm is committed to becoming a "compliance-first" business. This commitment comes after the RBI's regulatory action in February, which led to a significant drop in Paytm's share price. The company's shares fell nearly 90% from its IPO price of ₹2,150, hitting an all-time low of ₹310. Despite these challenges, Sharma remains optimistic about the company's future and its ability to navigate regulatory hurdles.
Paytm's steps toward regulatory compliance and market performance
Paytm Payment Services Ltd. (PPSL) received an extension from the RBI in March to resubmit its Online Payment Aggregator (PA) license application. On August 27, Paytm announced that it had secured approval from the Finance Ministry for its downstream investment in PPSL. This approval paves the way for PPSL to reapply for a payment aggregator license from the RBI. Despite the fluctuations, Paytm's stock has seen a nearly 30% increase over the past month.
