The digital payments company raised 183 billion rupees ($2.5 billion) in its initial public offering. It's the
largest ever in the country when measured
in local currency, surpassing Coal India's in 2010.
That IPO was worth 155 billion rupees ($3.48 billion), according to data from Refinitiv.
"The outcome of the IPO was not in doubt," Madhur Deora, the
president and group
CFO of Paytm, commented. The former investment banker has been with the company for five years.
But the amount of attention it drew took him by surprise.
"We expect to continue to incur net losses for the foreseeable future and we may not achieve profitability in the future," it said in its IPO filings, adding that the company will continue to spend heavily on hiring, marketing, and building infrastructure.
"Two years ago, we were in this super high investment phase where we were creating a lot of consumer and merchant traction on the platform," Deora said. "We have found that it is easier — much easier — than two years ago to acquire and retain customers, hence, we are spending a lot less."
Having said that, he added, "our aim is to reach 500 million Indians ... So we would continue to spend on marketing." As the cost of data and the internet in India falls, its population of 1.3 billion is coming online at a rapid pace. Paytm expects the number of smartphone users in India to hit 800 million in the next five years, giving a significant boost to its business.
Next phase of growth
Analysts have also pointed to the mounting competition, particularly as Facebook (
FB) and Google (
GOOGL) have joined the fray by launching their own mobile payments systems that make use of the Unified Payments Interface (UPI), an Indian government-backed technology.
Deora said he is not worried, as UPI-based payments make just one "chunk" of Paytm's business, which has now expanded into commerce, lending and other sectors.
While financial services are a relatively new part of the company's business, Deora said he is excited about the opportunity to be "democratic" with lending, and reach everyone from the self-employed to the daily-wage laborer. The company plans on strengthening this business with the money it has raised.
"A vast majority of Indians do not have access to formal credit .... They just don't have a credit history," he said. "So there's a lot of what we call [India's] underserved or unserved." "There's a huge market in providing access to credit," he added. Paytm has partnered with banks — including the country's largest private lender, HDFC — to provide services ranging from personal loans to buy now, pay later options.
"Pay later really suits the needs of younger millennials in the country, because many of them just find the process of getting credit anywhere else not suitable for them," Deora said.
SOURCE:
REUTERS
IMAGE SOURCE:
PIXABAY 
