https://x.com/rohits_bn/status/1757376138668880239?s=20

They have been consistently under delivering after overpromising over the last few quarters. I feel the management tries to sugar coat instead of conveying challenges and measures being taken to address them. I would have expected them to grow at GDP+5%, but they are unable to do so. I had entered at much lower levels and exited today after seeing multiple quarters of business underperformance.

Clarifying again with facts and not opinions:

1. Paytm’s ECL is 5% which is high in lending domain (and that too when the defaults haven’t peaked as they are fairly new in this domain). Irrespective of the topline their bottomline will be wiped off with the ECL as that would be extended in some form of FLDG/cost sharing.
2. Never said Postpaid was there revenue generator, but it forms bulk of their entry to other loans. It acts as a major feeder for personal loans, as it serves as a great underwriting mechanism in a short period as well as keeps customers from changing platforms. And this will be absent.
3. With regulator’s action none of the lenders will want to participate with Paytm as a partner, as it will be viewed as going against regulator. Hence, mentioned the cryptocurrency topic.
4. Paytm in only personal loans (not postpaid, not merchant loans) is not in top 5 and is even further beyond. To find names one can go to Google Playstore and find the apps ranking in Finance category. The ones doing lending among them in top 50 were doing more than what Paytm did last way back in FY23 end. (not namedropping companies as all of them are unlisted, PhonePe, Google are not the ones).
5. Regulator never takes their step back and they have been taking action against Paytm for six years now in one form or other, hence the deadline has very minor chance of extension but almost impossible to reverse.

Few points to others that I noticed in other posts:

1. No Paytm cannot get the CIBIL data of customers without their express consent even if they are doing bulk of their transactions using Paytm.
2. Their UPI services will be up and running before the deadline, but the merchants KYC will need to be done for their wallet business and that is going to cost any entity a bomb (that’s in news today also).
3. All PPBL services can be routed through other banks and in the future Paytm will get it done. PPBL was most probably a profitable entity, but the addition to the topline wasn’t much. However, the quoted figure by management as revenue drop is going to be much more than stated in the call.

Opinions:

1. In any other field, still you get forgiven after sometime. In financial services, it takes a long long time to get your reputation back. Regulator doesn’t take extreme steps all of a sudden. So a lot must have been actually wrong with the compliance and regulatory stuffs at Paytm.
2. Lending was the way ahead for major revenue generation. But with reputation loss and lending coming to a halt, the defaults are bound to go up and it will lay more difficulties for association with Paytm.
3. When there are tons of stocks giving spectacular returns why gamble with something that is surrounded by so much negativity. Yes you may lose a bounce-back opportunity but the risk reward ratio is not in your favour.

The only problem here is that front end (PayTM i.e. OCL) and backend (PayTM payment bank) has almost same management (all main 3 people were on board of PPBL – Mr. Mahur has now left the board) so in phonepe case there was no linkage b/w yes bank and phonepe in terms of management. I hope they give the same treatment as they given to PhonePe but here it is a little a bit different case.

Need RBI To Bless Us To Take Over Merchants Of Paytm Payments Bank: Axis Bank | CNBC TV18