Sunday, March 3

Has Demonetization Really Helped In Growth Of Paytm?

December 9, 2016- Now wherever we go, whether its small shops or a big store, we see a Scanning code on the wall with “Paytm logo” which says PAYTM KARO.

Paytm is an online payment transaction company that has been highly popular after the “Demonetization”.

After the Demonetization news was announced, on the next morning Paytm ads were carried on the first page of major newspapers of India.

So the common question arises “Does really Paytm have gained beneficiary after demonetization”?

As per sources, Paytm was seeking to raise money in August at a valuation of $5 billion.

After demonetization Paytm transaction touched 5 million in a day regularly. Paytm transaction total hit Rs 24,000 crore a day and the company registered a 700% increase in overall traffic and 1000%percent growth to Paytm wallets.


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Their numbers of transactions have also increased. But, the equity space has not seemed to improve. Paytm founder Mr. Vijay Shekhar Sharma has raised Rs 325 crore by 1% stake sale in the company. This value the company around Rs 32,500 crore or hardly near to $5 billion.

Paytm’s first funding was raised in February 2015 at a valuation of $1 billion from Alibaba’s Ant Financial. The second round of funding was in September by the same e-commerce company Alibaba, which put money at a valuation of USD 2.8 billion.

Alibaba has put around USD 700 million in Paytm and hold 40 percent of stake in the company.

As per the news Paytm was in the market to raise funds since the end of August 2016 for expansion in three lines of business i.e Online Payment, Payment bank, E-Commerce.

Paytm looking to raise USD 300 million (i.e around 2,000 crores) valuation of USD 5 billion.

So if Paytm was keen to raise money in August before demonetization was announced valuation of $5 billion, so it seems demonetization has clearly not improved the Paytm valuation.

In fact, Paytm ended up raising less money than what it intended to three months back.

In the future, we hope Paytm valuation would have increased and the company will be listed and this is the company where stock investors would love to invest.