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India's Alipay went public: it plunged more than 25 per cent on its first day, with Ant Group as its largest shareholder

via:钛媒体     time:2021/11/18 22:04:08     readed:142

Paytm, the Indian version of Alipay, which is inextricably linked to Ant Group, has finally completed its launch.

Paytm, India's largest e-wallet company, was listed on the Bombay Stock Exchange on November 18.The technology company, which raised 183 billion rupees ($2.5 billion), became the largest IPO in India's history to date, offering 2,150 rupees ($29) a share.Paytm has a market capitalisation of about $20 billion at the offering price.


Paytm's share price trend on its first day of trading

Like its Chinese counterpart Alipay, Paytm has a broad user base in India. Paytm has 333 million registered users as of March 2021, reaching 21 million merchants, according to the prospectus.The equivalent of half of India's Internet users are Paytm users。 Paytm has become India's number one and the world's third-largest e-wallet in terms of user volume.

Paytm's shareholder camp is luxurious.

In January and September 2015, Ant Group invested in Paytm twice, helping Paytm to enter the fast track of development by "co-investing in shares and technology output". Ant group remains Paytm's largest shareholder, with a 25 per cent stake. Alibaba, an affiliate of Ant Group, also owns about 7 per cent, with Warren Buffett's Berkshire Hathaway and Sun's SoftBank also key investors.

however The star company opened the day with a shock decline, closing down more than 25 per cent at Rs1,560.

Paytm's listing comes amid questions about its high valuation, earnings outlook and future ability to kill haemorrhage in the competition of strong rivals. Suresh Ganapathy, an analyst at Macquarie Capital Securities, points out thatPaytm's business model lacks focus and direction is unclear.Paytm will not make a lot of money just as a third-party platform unless it opens up its lending business. As a result, Ganapathy questions the scale and profitability it can achieve in the future.

Paytm's founder and CEO, Vijay Shekhar Sharma, said back in 2019 that Paytm would wait until it was profitable before considering a listing, but the risk warning in the prospectus suggests that the company may not be able to "achieve or maintain" profitability in the future. Paytm cut its losses by almost 40 per cent to $215 million in the 2020-21 financial year, but is not yet profitable.

According to Reuters, Equity Master senior research analyst Richard Agarwal said Paytm's revenue fell during the surge in the use of digital wallets and mobile payments in fiscal year 21. Despite a 60 per cent drop in marketing and promotional spending, the losses continued and its path to profitability was uncertain.

meantime Paytm's leadership in the market is also challenged

With the development of a unified payment interface for mobile cross-bank transfers by National Payments Corporation (NPCI), users don't need to deposit as much as Paytm's mobile wallets, or worry about the risk of switching between different wallets. The advent of UPI has significantly lowered the threshold for market participation, leading to a more competitive landscape.

Paytm's overseas competitors are surging because of the broad prospects for the Indian market, with companies such as Google, Wal-Mart, Facebook, Samsung Electronics, Xiaomi and Realme all launching payment apps in India because of the fact that UPI payments do not require a prepaid tool (PPI) licence. Such a competitive environment also poses a greater challenge to Paytm's financial performance.

(This article debuts Titanium Media APP, by | Cai Pengcheng)

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