Paytm Met With An Accident, It’s Now In The ICU: CEO Vijay Shekhar Sharma

It has been a tough few quarters for Paytm, and an admission of just how difficult things have been has come from CEO Vijay Shekhar Sharma — and in some evocative terms.

Paytm CEO Vijay Shekhar Sharma has said that Patym met with an accident, and is now in the ICU. Sharma was speaking at the JIIF Foundation Day event in Delhi, and expanded on the crisis that’s gripped the firm in recent times.

“The company for me is like a daughter,” Sharma said. “We were getting mature, going towards full profitability, making free cash and so on. I saw it as a daughter on the way for an important entrance test, but met with an accident, and is in ICU right now,” Sharma said.

“At a professional level, I would rather say we should have done better, there is no secret about it. We should have understood better…and we had responsibilities, we should have fulfilled, much better way…we learnt the lesson,” he added.

Paytm has battled a difficult few months ever since the Reserve Bank of India had ordered Paytm Payments Bank to stop accepting new deposits after 29th February. This had all but crippled the operations of the bank, and to make matters worse, had impacted Paytm in other ways — the bank’s Fastag customers were forced to port to other banks, and Paytm was forced to scramble to create tie-ups with other banks to continue its merchant operations. All this uncertainty meant its stock price was hammered, and its share in India’s digital payments fell.

But this isn’t the only blow the firm has faced in recent years. At one point, Paytm was India’s highest valued startup with a valuation of $16 billion, and aimed to go public at a valuation of $21 billion. But its IPO became the worst performing large IPO anywhere in the world with its stock crashing nearly 20 percent on opening day. Over the next few quarters, Paytm’s stock kept declining, and it currently trades at a near 80 percent discount to its IPO price.

The biggest blow that has hit Paytm has been the success of UPI — Paytm was the undisputed market leader in the wallet business, but as UPI became popular, companies like PhonePe and Google Pay took advantage, and they now collectively control nearly 80 percent of India’s payments market. Paytm had banked on its market leadership in payments to sell all manner of other services, but over the years it’s discovered that it doesn’t have any manner of moat in the business at all. And with regulatory concerns now all but shuttering its payments bank, the company — as CEO Vijay Shekhar Sharma puts it — is struggling in the ICU to survive.