According to Forbes statistics revised on March 16, Sharma was removed from the billionaire list as he has lost around INR 88 Cr every day.
As of March 15th, Sharma’s wealth was $999 million. Before Paytm’s IPO, it was $2.35 billion, but now it’s down to $999 million. One97 Communications is the parent company of the digital payments’ platform. Paytm’s stock dropped almost 70% on November 18th of last year since its initial public offering.
The fintech powerhouse was once the buzz of the town. The company has seen its value drop by about 70% since its IPO price of INR 2,150. Since Paytm’s IPO on November 18, 2017, Sharma has lost about INR 88 Cr every day.
The firm was valued at INR 1.39 trillion ($16 billion) on the day of its launch, placing it among the top 50 most valuable enterprises in India. On March 16, Paytm’s shares closed at INR 634.80, 7.15% higher than the previous day.
The issue
Recently, the company has been troubled by a series of issues. The RBI prohibited Paytm Payments Bank from accepting new clients on March 11, the second time since its launch in 2015. As a result, the Central Bank has also asked for an IT Audit in the company to do a thorough “system audit.”
Paytm Payments Bank is a partnership between Paytm and its founder, Vijay Shekhar Sharma. Paytm Payments Bank is not part of the public offering of One 97 Communications but an associate entity. Paytm Payments Bank powers Paytm’s insurance, digital payments, and loan services.
The RBI’s recent regulation comes months after it approved Paytm as a scheduled payments bank, opening the way for the business to expand its financial services offering. It also follows One97 Communications’ disappointing IPO.
Following an article on Bloomberg, it had claimed that the startup’s servers were exchanging data with Chinese organizations that had an indirect stake in the financial giant. While the company said they didn’t do it, the move caused problems for Paytm. The audit said data transmission to foreign servers was against Indian norms.
Paytm’s position will be in complications by its plans to seek a small finance bank license in May. With RBI on the case, the chance of having a finance bank license is low. Paytm Payments Bank got approved as a Scheduled Bank in December 2021. As a scheduled bank, the fintech firm may issue loans and seek a small finance bank license.
Paytm has also been badly hit by the market’s volatility. There has been a big drop in Indian tech share prices because of the ongoing war between Russia and Ukraine. A huge drop in the US share market and the threat of interest rate rises have worsened the situation.
The fintech giant reported losses of INR 778 Cr during Q3 FY22. It also made INR 1,456 Cr from operations in the quarter, which is almost 88.6% more than it made in the same period of FY21. Sharma’s struggles should not be overlooked, even if he now lost his billionaire title.
Sharma, who was born in a small town in Uttar Pradesh to a schoolteacher father and a housewife mother, was once got the title of India’s youngest millionaire in 2017. Paytm led the Fintech business during India’s demonetization. Paytm comes out to be the most reliable payment app for all small shopkeepers and consumers.
Published By: Apoorva Wakodikar
Edited By: Subbuthai Padma
