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Paytm's strong financial services now at 18% of total revenue

Paytm’s loan distribution product portfolio consisting of Paytm Postpaid, Personal loans and Merchant loans have gained immense popularity over the past few quarters as adoption grows across the country.Premium
Paytm’s loan distribution product portfolio consisting of Paytm Postpaid, Personal loans and Merchant loans have gained immense popularity over the past few quarters as adoption grows across the country.

The company’s revenue in the ‘Financial Services and Others’ business stood at 349 crore in Q2FY23, up 293% YoY and 29% QoQ, supported by sourcing and collection revenues in the loan distribution business

Reaffirming its dominance as India’s leading digital payments and financial services company, Paytm on Monday reported 76% year-on-year (YoY) growth in its overall revenue for Q2FY23. In its earnings release filed with the stock exchanges, the company highlighted that financial services accounted for 18% of total revenue generated in the quarter, primarily driven by stronger growth in the loan distribution business. 

The company’s revenue in the ‘Financial Services and Others’ business stood at 349 crore in Q2FY23, up 293% YoY and 29% QoQ, supported by sourcing and collection revenues in the loan distribution business, which offers “huge growth opportunity at attractive profitability" and higher scope of penetration going forward. 

The rising contribution of Paytm’s loan distribution business towards total revenue is clearly visible, with 9.2 million loans disbursed during the quarter, up 224% YoY and 8% QoQ. The total value of these loans stood at 7,313 crore, registering an increase of 482% YoY and 32% QoQ. With this, the company’s annualised disbursement run rate has increased to an impressive 34,000 crore. 

Paytm’s loan distribution product portfolio consisting of Paytm Postpaid, Personal loans and Merchant loans have gained immense popularity over the past few quarters as adoption grows across the country.

Paytm Postpaid disbursements at 4,050 crore saw a massive scale up, surging 449% YoY and 20% QoQ. The growing popularity of Paytm Postpaid is marked by the signed-up user base now crossing 6 million, and is widely accepted at over 15 million online and offline merchants. The lending product also continues to show significant cross-sell opportunities for the company in high-margin products such as Personal loans and credit cards.

Backed by stronger Postpaid adoption, the company has reported a massive jump in Personal loan disbursements, amounting to 2,055 crore in Q2FY23, up 736% YoY and 53% QoQ. The company noted that 40% of the disbursements were made to existing Postpaid users. The average ticket size for personal loans also increased 7% QoQ to approximately 1,10,000 with an average tenure of 14 months. 

Similarly, merchant loan disbursements rose 342% YoY and 46% QoQ to 1,208 crore for the quarter. This was boosted by the company’s strengthened leadership in the offline payments business, as 85% of loans disbursed were to merchants with devices. 

Paytm’s revenue from financial services is expected to contribute a higher percentage of overall revenue in future, as the three loan distribution products see greater penetration among citizens. The company believes that there is a “long growth runway ahead" and it will continue to seek growth and upsell opportunities as low penetration supports its future growth potential. 

Disclaimer: This article has been produced on behalf of Paytm by HT Brand Studio.

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