One97 Communications, the parent company of Paytm, a veteran of digital payment world, has incurred huge losses in the last financial year ended on March 31. The company incurred a net loss of Rs 4,217 crore on a consolidated basis. This includes businesses of Paytm Money, Paytm Financial Services, Paytm Entertainment Services, etc.
According to the company’s annual report, it had a loss of Rs 1,604.34 crore a year ago. That is, within a year, the company’s losses have more than doubled. In the last financial year, One97 Communications alone incurred a loss of Rs 3,959.6 crores, while the company had a loss of only Rs 1,490 crores a year earlier.
Income increased, but expenses also increased a lot
During this period, the company’s total income increased by 8.2 percent to Rs 3,579.67 crore. On the other hand, the company’s expenses doubled to Rs 7,730.14 crore.
The company said in its annual report, “The company has had to incur heavy capital expenditure in order to create a brand and strengthen business activity. We had to incur huge amount for many capital and operational expenses, due to which there is a loss during the financial year.
It is worth noting that Vijay Shekhar Sharma, the founder and managing director of Paytm, holds 15.7 per cent in One97 Communications. Sharma said that despite huge losses, the company is considering an IPO to raise capital from the market in the next two years.
In 2018, the company received $ 300 million in capital from American investment company Berkshire Hathaway. Foreign companies like SoftBank and Alibaba have also invested in it.
Paytm has recorded more than 1.2 billion merchant transactions in the first quarter of the current financial year. Apart from this, Paytm claims that it has retained a leadership position in the country in offline payments due to P2P and money transfer transactions.
One97 Communications Ltd. Paytm owned by it is accepted at around 14 million retail outlets and the company has a market share of 70 per cent in the region.
The company announced this year that it was now shifting focus from peer-to-peer (P2P) transactions to promote the use of digital payments in grocery stores, restaurants, commutes and other daily expenses.
Paytm said that it has also started a big campaign to teach users to scan QR codes, so that they can pay instantly from the Paytm app at grocery stores.