Domestic Mutual Funds Increase Stake in Paytm by 1%; Highlighting Confidence in Growth
Domestic mutual funds have increased their holding in Indian mobile payments company Paytm to 1% for the second quarter of FY25, indicating that they are gaining more confidence in the performance of the company. Mutual funds have increased their holdings in Paytm. According to the latest shareholding data filed by Paytm with the exchanges, two mutual fund houses, Mirae Asset and Nippon Mutual Funds, have taken 4.49% and 2.27% stakes, respectively.
Data from the National Payments Corporation of India for the June-August period suggests that Paytm has kept its steady pace in the Unified Payments Interface market share; the base of merchants is sound, and partners are increasing. “Financial firms point to Paytm being well-positioned for huge growth in India’s digital payment space, with possibilities of revenues skyrocketing manifold over the next decade,” said one of the investors. The company expects to be consistently profitable from FY26, according to it.
The Paytm firm is likely to gain an annual revenue of around Rs 100 billion by FY 28 with a surplus of Rs.25-30 billion over operating costs, says one of the top companies. Other brokerages also view the company positively and one such brokerage house that initiated coverage on Paytm recently has set a target price of Rs.1,170 for the firm within the next 24 months. The firm’s analysts also identified that the business model of Paytm was very strong and robust despite the regulatory actions recently by the Reserve Bank of India against Paytm Payments Bank (PPBL).
Its UPI services and Paytm soundboxes with point-of-sale systems have become an essential way for merchants to process payments. With the former points pushing India toward digital payments, growth from this can be expected from Paytm, according to analysts, who also highlighted adaptability in regulatory changes, strong technological capabilities, and solid relationships with merchants and MTUs as key elements in the growth trajectory for Paytm.
Paytm recorded Q1 FY25 operating revenues of Rs.1,502 crore with a balance sheet that had Rs.8,108 crore in cash. The company expects its future revenue and profitability will see better days ahead since, it stated that several elements of growth in gross merchandise value, merchant network expansion, and recovery in the loan distribution business will enhance the prospects of profitability and keep its cost as lean as possible.
Paytm, however, continues to stay core in its payments and financial services business and thus reiterates that it will always be an essential participant in the rapidly evolving digital economy of India.
