Paytm Q3 Update: Lending Activity Increases 401% YoY, Stocks Hit All-Time Low

Paytm, the listed fintech company has released its operating performance for the December quarter of fiscal year 2021-22, saying “skyrocketing growth combined with ramping up lending and device business” during the reporting period.

Image Courtesy: Jakub Porzycki

The Noida-based company reported 4.4 million loan disbursements, a 401% year-on-year increase, with loans totaling Rs 2,180 crore disbursed in the quarter, up from 470 crore. crores of rupees at the same period last year. Paytm further noted that all loans are made in collaboration with banking institutions and non-banking financial companies (NBFCs), saying that no FLDGs are offered to any lender for their loan transaction. FLDG, or First Loss Default Guarantee, is an agreement in which a third party agrees to reimburse a lender in the event of default by the borrower.

Paytm also improved its online payment business with the rollout of 2 million devices, according to the company. The total number of devices distributed on Paytm’s merchant base has increased from 900,000 as of June 30, 2021 to around 1.3 million as of September 2021, at the current figure.

In the third quarter, user engagement jumped 37% year-over-year to 64.4 million average monthly users (MTU). The company’s gross merchandise value touched Rs 2.5 lakh crore. In comparison, the previous quarter’s GMV was around Rs 1.9 lakh crore.

In the same period of the previous financial year (FY21), the big fintech generated Rs 663.9 crore in operating revenue. Its net losses increased by 8.42% to Rs 473.5 crore in the July-September quarter from Rs 436.7 crore a year earlier. In a regulatory filing, the digital payments company addressed the increase in revenue to a 52% increase in non-UPI payment volumes (GMV) and a more than three-fold increase in financial services, among other revenues.

Paytm’s statement comes as its shares plunged almost 6% to a new 52-week low of Rs 1,152 on Monday. Shares fell as brokerage firm Macquarie slashed its target price on the digital payments provider to 900 rupees per share from 1,200 rupees per share previously.

Paytm’s parent company, One97 Communications Ltd, managed to raise $2.5 billion through its IPO, but a 27% drop in its November 18 IPO made it one of the worst outings opening of a major technology company since the dotcom bubble of the late 1990s. Shares of Paytm have fallen nearly 38% since its disastrous IPO, and the company has significantly underperformed the Nifty index .

Source: Paytm Operational Performance Report

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