Paytm sticks its neck out; Swiggy, Zomato take enforced lunch break

Paytm has endured a torrid time as a public company as analysts and investors have questioned its lack of profits, decimating its share price. In February, the company reported a loss of Rs 780 crore for the December quarter, compared with a loss of Rs 474 crore in the previous quarter. Now, its founder has told shareholders the company is looking to break even by September 2023.

Credit: Giphy

Also in this letter:
■ Zomato, Swiggy go offline during lunchtime
■ Flipkart launches separate app for healthcare biz
■ Tata Digital starts testing UPI payments on super app

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Paytm founder and CEO Vijay Shekhar Sharma

Paytm’s parent firm One97 Communications is looking to break even on earnings before interest, taxes, depreciation, and amortisation (Ebdita) by end of September 2023, its founder Vijay Shekhar Sharma wrote in a letter to shareholders filed with the exchanges on Wednesday morning.


This Ebitda breakeven will exclude the cost of the company’s employee stock ownership plan (Esop), Sharma said.

VSS locked in: Sharma added that his stock grants would be vested to him only when Paytm’s market cap crossed the IPO level on a sustained basis.

Paytm issued shares at Rs 2,150 a piece in its IPO in November 2021 but by March the price had hit a low of Rs 521.

Its share price closed 5.08% up at Rs 640 on Wednesday.

• “Against the backdrop of volatile market conditions for high growth stocks globally, our shares are down significantly from the IPO price. Rest assured the entire Paytm team is committed to build a large, profitable company and to create long-term shareholder value,” Sharma wrote in his letter to shareholders.

Operating results: Announcing its operating results for the quarter ending March 31, 2022, Paytm said that it disbursed 6.5 million loans worth Rs 3,553 crore (roughly $474 million) over this period. It had clocked 4.4 million loan disbursals in the previous quarter.

The total merchant payment volume processed grew marginally on a quarterly basis to Rs 2.59 lakh crore (roughly $34.5 billion) in the March quarter, the company said.

Paytm said it had 70.9 million monthly transacting users and deployed another 900,000 point-of-sale terminals during the quarter.

BSE stepped in last month: In March, BSE had sought a clarification from Paytm on the continuous fall in its stock price.

The company said in its reply, “We would like to inform you that our company has been complying with Regulation 30 of the Sebi (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and have, from time to time, made all necessary disclosures to the stock exchanges within stipulated timeline.”

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Both Zomato and Swiggy went offline for about an hour on Wednesday afternoon. The issue appeared to have been caused by a power outage at Amazon Web Services, which many companies rely on.

Complaints: By the time both apps were back online, social media had been flooded with complaints from users. While some were unable to order food, others weren’t even able to browse restaurants on the apps.


AWS outage: At 2.46 pm, AWS said on its website that some of its servers had suffered a loss of power from 1:53 pm IST. “The issue has been resolved and the service is operating normally,” it said.

Companies respond: Swiggy and Zomato quickly responded to the complaints, saying they were working on resolving the issue.

Swiggy wrote to a customer, “We apologise for the long delay we are currently facing due to a technical glitch. This is not usual with us and our best minds are working on it to resolve it at the earliest. Please bear with us."


Zomato said, "Hi there, we are facing a temporary glitch. Please be assured our team is working on this and we will be up and running soon.”


Under the scanner: Earlier this week, India’s food delivery duopoly attracted the attention of the country’s competition regulator.

The Competition Commission of India (CCI) said on Monday it had ordered an investigation into the two companies’ apps to verify if they were "neutral".

The National Restaurants Association of India (NRAI), which represents over 500,000 restaurants, had moved the CCI in July 2021, accusing the two companies of anti-competitive practices.

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Flipkart has launched a separate app for its healthcare business, Flipkart Health+. It will operate with the marketplace model, in which third-party sellers will offer medicines and healthcare products on the platform.

Operating model: To start with, the platform will have over 500 independent sellers who have a network of registered pharmacists for validation of medical prescriptions and accurate dispensation of medicines. According to Flipkart Health+, it has put in place various quality checks and verification protocols to offer genuine medicines.

Why another app? In the future, the company plans to bring on third-party healthcare service providers that will offer other value-added services such as teleconsultation and e-diagnostics. This is one of the reasons Flipkart decided to establish a separate app for its healthcare business.

War footing: The development comes as the company continues to scale many of its new businesses, including epharmacy, travel and social commerce platform Shopsy, and double down on its grocery business. ET reported on March 31 that Flipkart had pumped in $143 million into its healthcare unit last month. The company also appointed former Apollo Health executive Prashant Jhaveri as CEO of its healthcare business in March.

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Tata Digital has started testing online payments through the Unified Payments Interface (UPI) on its ‘super app’ Tata Neu. It is set to launch the super app for all consumers on April 7.

We first reported on March 16 that the company was working with ICICI Bank and had sought clearance from the National Payments Corporation of India (NPCI) to make its UPI debut.

Entering the UPI space is a natural extension of the Tata Group’s ambitious ecommerce play and could be used to enhance the shopping experience on Tata Neu. Amazon India also has its own UPI service that offers shoppers cash back and other incentives.

We reported in January that Tata Digital had set up a new financial marketplace entity Tata Fintech to offer multiple financial products, including a retail payment gateway.

Non-banks dominate UPI: Non-banking platforms such as PhonePe and Google Pay account for the lion's share of UPI transactions each month. Owing to their technology-focused approach, their apps have fared better on UPI than those of banks. Amazon Pay, Paytm and WhatsApp Pay are the other prominent UPI apps. In March, UPI transactions in the country breached the 5 billion mark, according to data from NPCI.

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Twitter Inc said on Wednesday it has been working on an edit button since last year and will test the feature with select Twitter Blue members in the coming months.


Twitter said it did not get the idea for the button from a poll by its largest shareholder Elon Musk, who recently asked users if they wanted the feature.

On Monday, Musk disclosed a 9.2% stake in Twitter and started the poll on the long-awaited feature. Twitter chief executive Parag Agrawal also urged users to "vote carefully". Twitter said on Tuesday it would offer Musk a seat on its board of directors, a position the Tesla boss and entrepreneur plans to use to bring about significant improvements.

Musk likely to face SEC ire: Former securities officials and professors said Musk may have missed a key disclosure deadline and filed the wrong paperwork when he bought 9.2% of Twitter. Securities and Exchange Commission regulators could use any shortfall to try to punish Musk more for other lapses, some believe.

The SEC is already investigating Musk's Nov. 6, 2021 tweet asking his followers whether he should sell 10% of his Tesla stake.

Today’s ETtech Top 5 newsletter was curated by Arun Padmanabhan in New Delhi and Zaheer Merchant in Mumbai. Graphics and illustrations by Rahul Awasthi.