One 97 Communications (Paytm) IPO: Information analysis

One 97 Communications owned 'Paytm' is India's leading digital ecosystem for consumers and merchants. The company offers payment services, commerce and cloud services, and financial services to more than 33 crore registered consumers and 2 crore registered merchants, as of June 30, 2021 . Consumers use the company's platform for payment services such as money transfer, in-store payments, bill payments and financial products such as personal loans, credit cards, insurance and investment solutions. The company holds a 49 per cent stake in its associate Paytm Payments Bank through which it provides services such as wallets, FASTags, bank accounts and UPI services. Paytm Payments Bank is the only profitable arm of Paytm. On the other hand, merchants to this platform get access to payment offerings such as QR code and payment gateways. Lenders and insurance providers also use the company's platform to increase their consumer base. The company generates revenues from payment and financial services primarily in the form of transaction fees charged from its merchants, consumer convenience fees charged for certain types of transactions such as flight, train and bus bookings, and subscription fees for certain products, such as Paytm Soundbox and POS. For financial services, the company charges sourcing fees from financial institution partners and collection fees. This segment accounted for 75.3 per cent of its revenues in FY21, while the rest comes from commerce (in-store sales) and cloud services. Strengths: Its brand 'Paytm' is one of the most renowned payment brands in India. Paytm is also the largest payment platform in India in terms of numbers of transactions with GMV (Gross merchant value) of Rs 4,033 billion in FY21. It processed a total of 5.9 billion merchant transactions. In the second quarter of the current fiscal year, its GMV stood at Rs 1,956 billion as compared to Rs 947 billion in the same period last year. As per RedSeer, Paytm has a payments transaction volume market share of 40 per cent and wallet payments transaction market share of 65-70 per cent in India in FY21. The company's investor list includes some of the most prominent names such as Softbank, Warren Buffett, and Ant Group. Weaknesses: The com