PAYTM WILL BE OPERATIONALLY PROFITABLE IN 6 QUARTERS: CEO

Vijay Shekhar Sharma, founder and chief executive officer of financial services technology company One97 Communications Ltd that runs Paytm, informed India’s exchanges on Wednesday that his stock grants will be vested to him only after the company’s market capitalization crosses the initial public offering (IPO) level on a ‘sustained basis’.

“Against the backdrop of volatile market conditions for high growth stocks globally, our shares are down significantly from the IPO price,” Sharma said in a letter to shareholders on Wednesday. “Rest assured, the Paytm team is committed to build a large, profitable firm and to create long-term shareholder value. Aligned with this, my stock grants will be vested to me only when our market cap has crossed the IPO level on a sustained basis,” Sharma added.

The letter was notified to the country’s stock exchanges along with Paytm’s quarterly update on operating performance in which Sharma said he expects Paytm to be operationally profitable in the next six quarters. Sharma’s comments on the company’s path to profitability and the business growth numbers notified by the company lifted Paytm’s stock nearly 5% on BSE.

The stock ended trading on Wednesday at ₹639 apiece on BSE, up 4.9% from its previous close of ₹609.30.

Sharma’s comments follow the hammering that Paytm’s stock has taken in the public markets since it got listed on the bourses in November last year at an IPO price of ₹2,150. At the IPO price, Paytm had a market capitalization of nearly ₹1.4 lakh crore ($18.6 billion), which has since reduced to ₹41,443 crore ($5.52 billion).

Public shareholders have raised concerns over the company’s path to profitability as it has not registered a single net profit to date. Moreover, the company’s net loss for the quarter ended September 2021 widened to ₹473 crore, even as it reported a 64% growth in its operating revenue on year.