Subscribe to One 97 Communications: Arihant Capital

Arihant Capital IPO report on One 97 Communications

One 97 Communications Ltd (Paytm) was incorporated in 2000, is a leading digital ecosystem for consumers as well as merchants. In 2009, the company launched Paytm App, which is a 1st digital mobile payment platform to offer cashless payment services to customers. The app enables to customers to do cashless transactions at small to large stores & merchants, pay bills, online money transfer, access digital banking services by customers, tickets booking, insurance, investments etc. The company has over 22 mn merchants with INR 4 lakh cr merchant volume, 333+ mn customer base with 120 mn annual transaction and 1.3 mn payment services as on FY21. In financial services, The company have 65 million total payment accounts, 6.5 mn loans disbursed in last one year and having deposits of INR 5,831 cr as on FY21.

Valuation and Outlook

At the upper band of INR 2150, the issue is valued at a P/BV of 21.3x FY21 P/BV and 49.7x FY21 P/sales (post issue). Rising pace of digitalization continues to present significant opportunity to grow the user base for online transactions for bill payments, shopping , entertainment, and other financial needs. Monetizing the large installed customer/merchant base of Paytm for broader financial service offerings, such as credit, wealth, and insurance will is the key opportunity for the company and it would lead to the profitability going forward. Valuation of the company is on higher side. Thus, we recommend investor to “subscribe this issue for listing gain”.

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