Paytm is a fintech start-up in India.
Paytm is a financial service provider for both consumers as well as vendors, for clients they
provide financial solutions like mobile recharge, DTH recharge at the initial stage.
In India Paytm is known as very popular for making digital payments, they were offering a
Paytm wallet which was convenient for us to make payments easily.
Earlier, to pay the light bill we have to spend hours in the queue, then we can pay light bills
same for mobile recharge even for movies ticket.
In 2010 slowly, smartphones are getting popular because they get everything under one
umbrella people started using Paytm more.
Vijay Shekhar Sharma is the founder of Paytm in 2010 for sending and receiving money via
the internet.
Then slowly Indian railway, uber, and ola added option E-payment from Paytm.
Then Paytm launched an e-commerce payment system now Paytm helps to pay bus booking,
ait ticket, gas, tuition fee payment, electricity, water bill.
Paytm user base has grown now in august 2014 from 1.18 crores to 10.4 crores.
During demonetization announced by the Indian government in November 2016 Paytm
helped a lot of people with their transactions then Paytm advertisement becomes so popular,
Paytm Karo. people started using Paytm.
People are attracted to Paytm their cash-back offer helps them boost their customer
acquisition rate. And he becomes no 1 in our country in the year 2017.
At that time Paytm not helping customers but also the merchant because shopkeepers started
accepting Paytm payments. Although the shopkeeper doesn’t know the Paytm ecosystem how
works they had no option, so he starts using it.
Our Vision
Md od Paytm Vijay Shekhar Sharma have the philosophy that
“A company is worth the company it keeps.”
Paytm vision is to create an enormous impact on Indian economics,
“We are on the road to making an enormous impact on the country’s economic foundation.
We want
millions to accompany us and benefit from this journey.
We want to make a positive difference by empowering the lives that we touch.”
Our mission
“We intend to reach every inch of the country and en-route, empower small enterprises. We
commit
to operate in an economically, socially, and environmentally responsible manner. We hope to
use
our influence to garner financial & other support for disaster victims & the underprivileged.
We do our best to compensate negative effects on the environment. We wish to share our
technical
knowledge with the deserving to empower them.
We believe in providing equal opportunity for all our people, as well as those whom we come
across in our course of work.”
Paytm's Revenue and Growth
According to the company's official statement, Paytm Payments Bank has received RBI
approval to function as a scheduled bank. The Reserve Bank of India Act, 1934, includes it in
the Second Schedule. This will enable the bank to engage in government and major
corporation Requests for Proposals (RFPs), primary auctions, fixed-rate and variable-rate
repos, and reverse repos, as well as the Marginal Standing Facility. Paytm Payments Bank is
now also qualified to participate in government-run financial programmes. According to the
RBI Act of 1934, a bank can be added to the second schedule if it can persuade the RBI that
its operations are in good order.
During the July-September quarter, Paytm's revenues increased by 63.6 percent to Rs 1,086.4
crore. During the same previous fiscal period, operational revenues were about Rs 663.9
crore. This rise in revenue is mostly due to a 52 percent increase in non-UPI payment
volumes (GMV), as well as a more than threefold increase in financial services and other
revenues. In Q2FY21, the Fintech unicorn saw a 50 percent increase in total income, which
was recorded at Rs 1,134.5 crore, up from Rs 758.1 crore in the previous quarter.
In Q3 FY22, Paytm's revenue from operations was Rs 1456 crore, bringing the company's
total revenue to Rs 1,533.4 crore. This represents a 34% increase in income over the Rs 1,086
crore earned in the July-September quarter of FY22. Revenues for the Vijay Shekhar Sharma-
led company increased by 88.6 percent from Rs 772 crore in the same quarter last year.
In November 2019, Paytm received its newest Series G another round funding from T Rowe
Price, an investor. As a result, the company's total value has increased to $16 billion.
Paytm's total revenue, which was Rs 3,540.8 crore in FY20, has fallen to Rs 3,186.8 crore in
FY21. Reduced commercial operations as a result of pandemic-induced lockdowns are to
blame for the Fintech behemoth's unexpected dip in revenue.
Paytm - Initial Public Offering
According to reports dated October 8, 2021, Paytm enlisted sovereign wealth funds as anchor
investors in its Pre-IPO placement, aiming for what was expected to be the largest IPO issue
after Coal India. Some of the major investors in talks with Paytm include the Abu Dhabi
Investment Authority (AIDA), the Government of Singapore Investment Corporation (GIC),
and the Canada Pension Plan Investment Board (CPPIB). The list also contains BlackRock, a
financial holding corporation established in the United States, and Nomura, a Japanese
financial holding company.
Paytm, helmed by Vijay Shekhar Sharma, has received SEBI permission, which has been
delayed since July 2021, when it submitted its DRHP with the market regulator to fund Rs
16,600 crores.
The much-anticipated INR 18, 300 crore Paytm IPO round took place On november 8, 2021,
with a price range of INR 2,080-INR 2,150. According to reports, the company's retail
investors subscribed to 36 percent of their earmarked shares, or 0.36 times, in the first hour of
the offering. During the first hour, retail individual investors and non-institutional investors
were the ones who contributed. Prior to the IPO round, the company was successful in
obtaining money totalling a record $1.1 billion from its anchor investors on November 3,
2021, which was also named India's largest anchor round. Paytm's first public offering (IPO)
was oversubscribed ten times by 74 investors, including:
Blackrock - INR 1,045 Cr
CPPIB - INR 938 Cr
Birla MF - INR 555 Cr
GIC - INR 533 Cr
On Day 2, the firm obtained close to 48 percent of the total subscriptions and is expected to
finish its IPO with a subscription of over 56 percent on Day 3. However, institutional and
non-institutional investors have yet to show considerable interest in the company.
Despite a massive and successful IPO round, Paytm's price began to drop as soon as when the
shares were opened for trade on the NSE. Paytm's stock began at Rs 1,950, down 9.3% from
its initial public offering price of Rs 2,150. According to sources dated November 18, 2021,
the company witnessed sustained losses throughout the day today, reaching a record low of
28 percent at Rs 1,560. The stock's value dropped even more on the second day of trade.
Paytm's share prices ultimately rose by 9% following a two-day dip in which they had nearly
dropped by 37%. Paytm's market value has risen to INR 96,398.29 crore. On November 24,
2021, the second day of the climb in Paytm parent's share prices, the market capitalization of
the firm surpassed the 1 lakh crore mark for the second time.
Paytm business model
Paytm value preposition
Paytm's recharging business is one of its most visible offerings, and it was the company's first
service offering. With the support of its Paytm Wallet, E-commerce vertical, and the release
of Digital Gold, the company went on to diversify its services by generating newer services.
Paytm adds value to merchants by Paytm adds value to businesses by providing a variety of
digital payment options, both in-store and online. It also takes into account other traditional
ways such as debit and credit cards, as well as newer developments such as QR codes, email
links, text messages, and Paytm's digital wallet service, as well as its competitors' offerings
such as United Payments Interface (UPI).
Paytm also provides the hardware needed for physical in-store purchases. Paytm's payment
services are also integrated with its Smart Retail platform, a solutions-based business model
designed to provide additional value to retailers by allowing them to manage and optimize
payments as well as other important features such as analytics, inventory, and customer
engagement from a single system.
Individuals benefit from Paytm because: In comparison to Western countries, Indians were
not yet accustomed to using credit cards. According to reports released in 2016, cash
payments were used for the majority of transactions in India (about 95%). This is why users
who wanted to get cashless or digital without going cashless or digital went to Paytm.
SWOT Analysis of Paytm
Strengths, Weaknesses, Opportunities, and Threats are the four components of a SWOT
analysis. Internal variables determine Paytm Wallet's strengths and weaknesses, whilst
opportunities and dangers originate from external factors wherein the Paytm Wallet operates.
SWOT analysis will aid us in not just gaining a better understanding of Paytm Wallet's
current competitive advantage, but also in defining how things must evolve to retain and
maintain it.
Strength: - Paytm Wallet is amongst the most efficient companies in its industry, with
improved efficiency and effective operations management. The success of the
implementation and effective operations management is to be credited for the results.
An experienced and effective leadership team — The Paytm Wallet senior management has
a track record of accurately predicting market developments over the last decade.
Weakness: - Paytm Wallet seems to have little expertise in the international industry, despite
being a prominent participant in the domestic market. Paytm Wallet, as per Shernaz
Bodhanwala of Diganta Chakrabarti, need international skills to enter growing markets.
Competitors can easily copy the Paytm Wallet business strategy — The business model of
Paytm Wallet, according to Shernaz Bodhanwala of Diganta Chakrabarti, may be easily
reproduced by other competitors in the market.
Opportunity: - E-Commerce and social media-oriented Business Models — In the foreign
market, Paytm Wallet can use an e-commerce business model to connect with local vendors
and logistical providers. Paytm Wallet's rise on social media can help the company lower the
cost of expanding into new markets and reaching out to customers with a much smaller
marketing budget.
Artificial Intelligence Advancements – Paytm Wallet can employ artificial intelligence
advancements that can help predict customer demands, cater to specific sectors, and improve
recommendation engines.
Threat: Customers are increasingly switching to a mobile-first environment, which could
stifle growth because Paytm Wallet still lacks a fully-featured strategy.
The growing popularity of digital players like as Amazon, Google, Microsoft, and others may
limit Paytm Wallet's maneuvering room, putting greater pressure on marketing budgets.
Simply remove the non-essential aspects after organizing all of the factors listed inside the
Paytm: Infrastructure Needs by a Diversification case study based on SWOT analysis. This
will assist you in constructing a balanced SWOT analysis that shows the true significance of
components rather than simply tabulating all of the factors presented in the case.
PESTLE Analysis of Paytm
Political, Economic, Social, Technological, Environmental, and Legal variables that influence
the macro-environment in which Paytm Wallet operates are referred to as PESTEL.
Political and Legal Structure - The political structure appears to be stable, and both economic
and international policies are consistent.
Political agreement among various political parties on tax rates and investment programs.
Over time, the country has attempted to reduce the entry hurdle and simplify the tax system.
Economic Factors - The movement of the foreign exchange rate is also a sign of economic
stability. The currency inflow and outflow should be carefully considered by Paytm Wallet.
Due to the unpredictable foreign market, several Paytm Wallet opponents have lost money in
countries like Brazil, Argentina, and Venezuela.
According to Diganta Chakrabarti's Shernaz Bodhanwala. Consumer disposable income,
household debt, and the effectiveness of the financial market should all be constantly
monitored by Paytm Wallet.
Technology - 5G has the potential to alter the business environment, particularly in terms of
Paytm Wallet marketing and promotion. As a result of machine learning and artificial
intelligence, speed will become more important than planning. Paytm Wallet will need to
develop solutions to function in such a situation.
Environmental Factors- Consumer involvement is having a huge impact on the branding,
marketing, and corporate social responsibility (CSR) initiatives of Paytm Wallet.
- Paytm Wallet's cost structure may be influenced by environmental rules. In some markets, it
may have an even greater influence on the cost of doing business.
Legal Aspects - In certain of the markets where Paytm Wallet operates, intellectual property
rights may pose a legal danger. Property rights are often a matter of concern for Paytm
Wallet, which must invest heavily in infrastructure just to enter a new market.
Porter’s five force model
Porter's Five Forces: How Industry Structure Is Dependent
To examine the competitiveness experienced by the protagonist in the case study, use the
Porter Five Forces model. The Porter five forces analysis will assist you in comprehending
and addressing the type and amount of competition, as well as how Paytm Wallet can
compete.
Even though many industries appear to be very different from the outside, when these five
forces are examined closely, they determine the profit drivers in each business. In, you may
utilize Porter Five Forces to identify major profitability factors of Paytm Wallet.
1. Rivalry among existing players— When competition is fierce, existing players like Paytm
Wallet find it difficult to make long-term earnings.
2. Suppliers' negotiating power - If suppliers have great bargaining power, they would be able
to exact a higher price from Paytm Wallet.
3. Buyers' bargaining power — Buyers with significant bargaining power tend to force prices
down, restricting the Paytm Wallet's ability to create sustainable profits.
4. Threat of substitute products and services - If somehow the threat of substitute products
and services is strong, Paytm Wallet must either continue to spend in R&D or risk losing
market share to disruptors.
5. Threat of new entrants - If there is a significant risk of new entrants, present players will be
willing to accept lower profits to mitigate the risks.
Cost leadership: -
Paytm: Increasing Growth through Diversification might aim to be the lowest-cost producer
in its field in terms of cost leadership. Depending on the industry factors and structure, it can
become a cost leader in a variety of ways. Paytm Wallet can evaluate - (pursuit of economies
of scale, proprietary technologies, supply chain management alternatives, supplier
diversification, preferential access to raw materials) and other considerations when pursuing a
cost leadership strategy.
differentiating strategy:-
Based on the industry forces described in the Paytm Wallet could pursue a differentiating
approach. Paytm Wallet may use a differentiation strategy to stand out in its sector by
offering a value proposition that buyers value. Paytm Wallet can choose one or more features
that will help it stand out in the eyes of clients for a certain demand. The goal is to obtain a
premium price as a result of the offering's distinctiveness and uniqueness. Paytm Wallet can
benefit from a Porter Five Forces analysis of the industry to avoid areas that are already
crowded with competition.
Ansoff matrix of Paytm: -
Paytm is an Indian internet marketplace. It is available using the service in eleven languages.
Mobile charges, travel, energy bill payments, events, and movie bookings are just a few of
the use-cases available. With the Paytm QR code, customers can pay for groceries, veggies
and fruits, parking, restaurants, pharmacies, educational institutions, and tolls in-store. 2020
(Paytm).
The market/product expansion grid is another name for the Ansoff Matrix. It is a model that
businesses use to analyze and plan their growth initiatives. This matrix depicts four
alternative strategies for assisting the company's growth. This also examines the danger of a
company's expansion.
Market Penetration
Market Penetration is indeed a significant growth strategy that focuses on a company's
existing product in an existing market. This method can be used by the corporation to boost
the company's product sales in the market where it operates. In this area, there are numerous
options to expand the firm. Paytm is relying heavily on its e-commerce services to expand its
company. Paytm is an online retailer and payment service provider that offers mobile
recharge, power, gas, financial services, and gadgets, among other things. Its recharge
gateway is thought to be one of the ways it broke into the market.
In India, the Paytm recharge portal is a reliable system that many customers prefer over other
options. Paytm, on the other hand, can utilize it to expand geographically in India. To expand,
the organization can take advantage of contracts and partnerships with other agents. It can
also expand its distribution network to include more retail stores. Consumers may also be
able to use the recharging gateway at other retail outlets, according to the business. This will
assist it in expanding its customer base.
Product development
Product development is regarded as the second most important aspect of a company's growth
strategy. This implies that the corporation must introduce new products for the existing
market to expand its customer base and sales. Paytm employs this method to meet its growth
goals. The corporation can also alter an existing product and reintroduce it to current
customers as something new. Paytm's product development strategy included IRTC- Ticker
booking, hotel reservations, events and movie tickets, autos, and flight bookings. The
company enticed its existing clients to use Paytm's new offerings. Customers will be able to
book bookings from a trusted source with ease. Paytm put more money into research and
development to figure out whatever offerings will benefit its users and the firm in the long
term. Paytm employed smart marketing and a variety of product development approaches to
raise user awareness of its newly announced services.
market development
market development refers to the company's existing products being introduced into new
markets. To attract new customers, the corporation seeks out new markets to promote its
products. Payment Gateway, Ex-Grofers, Domino's payment, and Paytm's web page are some
of the new services Paytm has provided in new regions. The organization provided services
in many parts of India and expanded its market to provide services throughout the country.
This can be accomplished by aggressive advertising and aggressive promotional techniques.
Paytm can market itself aggressively on social media and respond to customer questions.
Paytm can also supply users with information about the services and the firm. As a result, the
company will gain a competitive advantage by being the first to market.
Diversification
recommends a growth strategy based on diversification. It implies that a corporation must
develop new items and offer them in new markets to disperse risk over several locations. This
technique was adopted by Paytm, which launched Financial Products, ICICI life insurance,
gold loan payback Malappuram, and a metro card. This assists the organization in obtaining a
place in the financial market, which is distinct from the retail area. This reduces the risk to a
larger area. In addition, the company's product line has grown as a result of increased market
penetration. This also aids Paytm in increasing its overall market share. More people will use
the company's products and services, which will benefit the company in the long run.
Financial analysis of Paytm: -
2 pages
Write own analysis
