Increasing sales and reduced costs have helped the FinTech rebound from those troubles, Bloomberg News reported Thursday (Jan. 29), citing a regulatory filing. The company reported consolidated net income of 2.25 billion rupees (about $24.5 million) in its most recent quarter, exceeding analysts’ expectations. Sales rose 20% to 22 billion rupees.
Paytm founder Vijay Shekhar Sharma slashed expenses, sold off parts of the business and strengthened relationships with lenders in India to bounce back from a regulatory roadblock that impacted the business, the report said.
India’s financial watchdog essentially shuttered Paytm’s banking satellite in early 2024 after years of warnings about unregulated data flows, according to the report.
In January 2024, the Reserve Bank of India (RBI) announced that an audit had “revealed persistent noncompliances and continued material supervisory concerns in the bank, warranting further supervisory action,” PYMNTS reported at the time. The regulator did not specify those concerns.
The company has since divested of its movie and events ticketing business to focus on its core operations, the Bloomberg report said. RBI in August gave its blessing to Paytm’s bid to become an aggregator.
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As an aggregator, Paytm can collect and settle payments for businesses using its network, offering security and ease in accepting digital transactions, according to the report. On Thursday, Paytm said it started enlisting online merchants following the RBI approval.
Paytm also said its consumer UPI gross merchandise value climbed 35% in the last nine months, more than double the growth of the industry, per the report. The company said it has consistently won over more customers on UPI, a system that allows for instant money transfers by connecting banks with payments apps such as Paytm and Google Pay.
Rivals in the space are also making progress. Among them is PhonePe, a Walmart-backed company that is India’s largest digital payments firm. Last week saw reports that the company is preparing for an initial public offering (IPO).
PhonePe filed preliminary documents via the confidential route for an IPO last September. Reports at the time said the listing could raise up to $1.5 billion and value the company at around $15 billion.
Research by PYMNTS Intelligence has spotlighted the popularity of digital payments in India, with digital wallets serving as the preferred payment method for 55% of retail purchases.
