One 97 Communications Ltd, the owner of the fintech platform Paytm, on Saturday said its net loss for the second quarter of the
2021-22 financial year has widened by 8.4% as expenses rose, reported
PTI.

Disclosing its earnings for the first time
since making its debut in the stock market in November, Paytm reported a
consolidated net loss of 4.74 billion rupees ($63.2 million) compared with 4.37
billion rupees in the same period a year earlier.

Also Read: Explained: All about Paytm IPO, India’s largest public issue

“We have maintained the growth
momentum in our payments services business, expanded our financial services
business aggressively and are on our way to pre-COVID volumes for Commerce and
Cloud services,” Paytm’s management said in a statement.

Paytm, who has investors in China’s Ant
Group and Japan’s SoftBank Group Corp among others, raised $2.5 billion in what
was India’s biggest IPO this month, but made a dismal debut on the stock
exchanges last week.

The stock has recouped some of its initial
losses but remains 17% below its issue price.

“Paytm faces stiff challenges in its
customer acquisition engine, which would slow down its revenue growth in the
core payments business,” brokerage JM Financial said in a note to clients
a day ahead of Paytm’s earnings. “We find valuations rich and the path to
profitability fraught with high execution risks in context.”

The company said its gross merchandise
value from transactions other than a state-backed peer-to-peer payments
network, popularly called UPI, grew 52% in the quarter from a year earlier.

Also Read: Paytm CEO tweets about “longest Zoom call”, internet takes it up as a challenge

In India’s digital -payments market, Paytm
competes with Google and Walmart Inc’s PhonePe, and all of these companies
offer peer-to-peer payments on UPI.

The company said it was “well
funded” with a cash equivalent and investable balance of 110 billion rupees
including through the initial public offering.

Founder and chief executive Vijay Shekhar
Sharma has said investors will need time to understand the company’s business.