Paytm says it clocked $11.2Bn in Oct’21 “GMV”, but that isn’t arresting its share price slide

Paytm says it clocked $11.2Bn in Oct’21 “GMV”, but that isn’t arresting its share price slide

Paytm, the digital payments giant that had a forgettable public market debut last week (which became even more forgettable today), has now up with some ‘GMV’ numbers for us. Soon after its listing, Paytm reported that its gross merchandise value (GMV) for the month of October 2021 amounted to ₹832 billion (nearly $11.2 billion).

Now before we go ahead in all aww of such big numbers, it is important to note that GMV numbers are completely insignificant in a company’s financial’s prospective. For start, Indian ecommerce companies have been reporting this massive GMV numbers for years now, often putting people in illusion of their actual earnings. GMV numbers simply reflect the volume of trade happening on Paytm, or any other ecommerce company for that matter.

So yes, while the high volume is great, that hasn’t really translated into any significant revenues for Paytm. And that continues to show the massive investor distrust in the company. Paytm’s share price, which hit lower circuit on debut, is down by a further 12% today, at the time of writing this piece. The stock, that Paytm sold ₹2,150 during IPO subscription, is now trading at ₹1,374 as we write this piece.

In a disclosure with the stock exchanges on Sunday, the company said that the festive season drove the growth, as well as an increase in the number of merchants and consumers, adoption of new products, number of transactions for online and in-store merchants, and in deployed devices. The GMV jumped 131% when compared to October 2020.

Paytm’s monthly transacting users clocked a growth of 35% year-on-year to come at 63 million in the month of October 2021, an increase from the 47 million monthly users it had in October 2020. Q3 2021 saw Paytm have 57 million monthly transacting users. The GMV per monthly transacting user increased to $177 from $104.

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Paytm parent One97 Communications said that the company would be announcing the results for the third quarter of this year on November 27.

“Our strong operating performance continued in the month of October 2021, with increasing numbers of consumers and merchants transacting on our ecosystem, increasing frequency of transactions, and increasing adoption of our different products and services,” it said, adding that it witnessed strong adoption of its devices business amongst merchants. The total number of devices deployed across its merchant base has increased from 0.9 million as on June 30, 2021 to nearly 1.3 million as on September 30, 2021, coming to nearly 1.4 million as on October 31, 2021.

On loans front — the only avenue where Paytm could make some real money — Paytm’s disbursals almost doubled with over 2.8 million loans in Q2 FY22 as well as strong growth for its credit and lending business, including Paytm Postpaid and merchant lending – it registered 2.84 million loans in Q3 2021, an increase from the 1.43 million loans in the previous quarter. It issued 1.3 million loans in October worth $84 million through its financial institution partners, an increase of 472% in the number of loans disbursed and 418% in value when compared with October last year.