According to documents filed with the Registrar of Companies (RoC), Paytm’s net losses in the financial year ended March, 2016 has increased by almost 312% over the previous year. Paytm reported a loss of INR 372 crore for the financial year 2015, this year it has increased four-fold to INR 1,549 crore. The company although didn’t furnish details of its revenues for the year ended March 2016, it has projected a revenue of INR 869 crore for the year in the RoC filing.
Paytm is operated by One 97 Communications, founded by Vijay Shekhar Sharma who according to the filing drew a salary of INR 3.1 crore in the fiscal year 2015-16 compared to INR 2.3 crore, the previous year.
Paytm earns revenue through the mobile wallet and e-commerce business. A few of Paytm’s payments business includes mobile recharges, money transfer, pay bills, pay cab fares and flight, bus and railway ticketing, etc. The company didn’t give away any reasons for its soaring losses. However, it is believed that cashbacks, massive discounts and continuously pouring money into marketing have hit the company quite hard. Paytm is one of the biggest spenders on marketing and advertising in the digital payments space. It has further enhanced its marketing budget after the demonetization of high-value currency notes. Paytm reported revenue of INR 336 crore and loss of INR 372 for the fiscal year 2014-2015, as compared to revenue of INR 210 crore and loss of INR 6 crore for 2013-2014.
When contacted, a company spokesperson told TOI in an emailed response, “The technology sector needs front-loaded investments with a long-term vision for profitability. This year, we have invested heavily in marketing, business expansion and manpower. This will not only help us drive sustained growth over the long-term but also bring us closer to our vision of integrating half a billion Indians to the mainstream economy.”
Paytm is among the few startups in India to have achieved unicorn status, as of June 30, 2016, Paytm was valued at $2.3 billion. It recently raised INR 2.47 crore by allotting shares to three of its non-executive directors: Neeraj Arora, Naveen Tewari and Ruchi Chandrakant Sangvi. “The amount invested in this offer will be utilised in the manner set forth in the business plan approved by the board of directors,” the company said in its filing to the RoC. Just last week, TOI reported that Vijay Shekhar Sharma who held over 21% stake in One97 Communications sold 1% of his holding to raise INR 325 crore which he will use to fund his planned payments bank, having got an in-principle approval from the country’s central bank.
Paytm, which currently reaches to around 39,000 pincodes across the country, is adding more sellers in the tier-II and tier-III cities and beyond. The company 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.
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