Losses for One97 Communications, the parent company of digital payments major Paytm, have been widening.
As a part of its annual report, a copy of which was reviewed by YourStory, One97 Communications' consolidated losses soared to Rs 4,217.20 crore in the fiscal year 2018-19. This is a 163 percent increase from last fiscal year (FY’18), when the consolidated losses for the company stood at Rs 1,604.34 crore.
In addition to this, One97 Communications reported a loss of Rs 899.64 crore in FY’17. Hence the losses from the last fiscal (FY’19) have mounted by almost five times.
What is surprising is that with losses mounting up, last fiscal, the revenues for Paytm’s parent hasn’t grown significantly.
One97 Communications’ consolidated revenues stood at Rs 3,579.67 crore in FY’19. This is not much of an increase (approx eight percent) since last fiscal (FY’18), when the consolidated revenues for the company stood at Rs 3,309.61 crore.
In comparison, consolidated revenues for One97 stood at Rs 780.19 crore for FY’17.
The consolidated numbers include One97 Communications’ other revenues including its investment platform, Paytm Money, as well as its entertainment and financial services businesses.
Replying to YourStory’s queries on the same, a Paytm spokesperson said,
"For the last two years, we have been investing $1 billion each year to expand digital payments ecosystem in our country. We will further invest about $3 billion in the next two years to scale the same. We believe India is at the inflection point of digital payments and Paytm’s sole focus is towards solving the merchant payments and offering them financial services. We will invest Rs 20,000 crore in the next two years towards achieving this."
The total expenses for the company also ballooned in FY’19 to Rs 7,730.14 crore, which is almost a 60 percent increase from last fiscal when One97 spent Rs 4,864.53 crore in expenses.
This news comes at a time when Vijay Shekhar Sharma, Founder, Paytm, is planning to take the company public in the next two years.
According to the annual report, One97 Communications is also increasing its existing ESOP pool from 1,923,620 equity options to 2,166,524 equity options of Rs 10 each.
Last month, Paytm (owned by One97 Communications Limited) said that it is allocating Rs 750 crore this financial year to acquire new customers and merchants in small cities and towns. Then in June, Paytm said it would invest Rs 250 crore for the expansion of Paytm QR in Tier IV and V towns this year.
Paytm expects to reach more than 20 million merchants across India by the end of this fiscal with this investment.
(Edited by Saheli Sen Gupta)
Tarush is driven towards delivering unbiased and accurate reportage while engaging with as many mediums as possible to narrate a fresh perspective. Working for the past few years in the digital space with YourStory, he has covered the Indian technology ecosystem extensively, focusing on new age Fintech companies, while building strong connects within the industry.