T Rowe hikes Paytm's valuation by 35pc to take enterprise value to $16B

Fintech giant Paytm's FY 2020 revenue has increased to Rs 3,629 crore, even as cash burn has reduced by over 60 percent in the last 18 months.
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US-based mutual fund T Rowe has raised Paytmvaluation by about 35 percent to $255 per share, taking the total enterprise value of the Indian digital financial services firm to $16 billion, according to a regulatory filing.

T Rowe Price Communications and Technology Fund has valued its investment in One97 Communications (operates under brand name Paytm) at $82,16,610 for 32,222 shares, according to a SEC filing of the company.

This implies that the value of each Paytm share was $255 as on September 30, 2020.

The mutual fund company had earlier cut down the valuation of Paytm to $188 a share due to the impact of the COVID-19 pandemic.

When contacted, Paytm spokesperson said, "We see strong traction in our business across digital payments, consumer internet, merchant services, and financial services. We are thrilled and motivated with all our shareholder's support that Paytm has always enjoyed. This has helped us in creating India's home-grown digital champion."

T Rowe Price had invested at least $150 million in Paytm in December 2019.

The Paytm spokesperson added that every investor who has ever invested in Paytm has held on to the shares for at least 5 years and has always sold it at a profit.

Paytm's financial year 2020 revenue has increased to Rs 3,629 crore, even as cash burn has reduced by over 60 percent in the last 18 months.

In another development, Paytm announced waiver of all charges on MSME merchant transactions. The move would help to ensure that these merchants have adequate liquidity to expand their businesses.

According to the press release, the company is now taking payments revolution to the next level by enabling the merchant partners to accept payments from Paytm wallet, UPI apps, and RuPay cards at zero charges. Paytm will absorb Rs 600 crore in MDR charged annually by banks and other charges to support MSMEs during the ongoing pandemic.

(Disclaimer: Additional background information has been added to this PTI copy for context)

Edited by Megha Reddy

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