Spread the love

Following Paytm’s announcement of its plan to raise US$3bn through an initial public offering (IPO):

Swati Verma, Associate Project Manager of Thematic Research at GlobalData, a leading data and analytics company, offers her view:

“Paytm faces intense competition from Google, Amazon and Flipkart in the Indian mobile payments market. It was the undisputed leader at the time of demonetization in 2016. However, since then, it has lost market share to Amazon in ecommerce payments and Flipkart’s PhonePe and Google Pay in mobile proximity payments (MPP). Facebook has further disrupted its market by adding a payments feature to WhatsApp. Therefore, Paytm has planned to raise IPO, diversify its businesses with the help of the raised IPO capital and thus, regain the lost market share.

“India is one of the fastest-growing mobile payment markets and offers a huge opportunity for both foreign and domestic players. According to GlobalData forecasts, the market was worth US$500bn in 2020, and will grow at a compound annual growth rate (CAGR) of 41% to be worth US$2 trillion in 2024.

“The funds raised from the listing will allow Paytm to diversify its offering. Paytm is expanding beyond its core business and aiming to become a super-app like Alipay by integrating services such as shopping, gaming, travel, insurance and investments. It has its own ecommerce platform (Mall) and a mutual fund service (Money). In November 2020, it launched a mobile gaming platform ‘First Games’, offering esports and fantasy sports. In 2019, it acquired NightStay Travels (a hotel booking platform).

With new funds, Paytm will be able to strengthen its position as a super app. It will also continue to invest in other digital themes like social media and digital media. These investments will help it to maintain a prominent position in the highly competitive Indian market.”