Paytm Money, which recently got nod from the Pension Fund Regulatory and Development Authority to offer NPS investment products through its platform, is all set to launch it this fiscal.
It also has SEBI approval to provide stockbroking services, Pravin Jadhav, MD & CEO, Paytm Money tells Sunitha Natti in an interview.
Paytm Money recently received PFRDA approval to offer NPS investments. What’s the growth in this segment?
In September 2019, PFRDA announced that they have crossed 3 crore subscribers.
The majority of the subscribers are enabled via Atal Pension Yojana or as Central and state government employees.
We feel that NPS is a good product for retirement solutions and there’s an upside to improve its awareness and adoption.
We hope to emerge as the single largest contributor for NPS under the POP (Point of Presence) category.
Our approach is to simplify and digitise the offering, and we expect to launch NPS this financial year itself.
PayTm Money has completed one year of operations. What are your expansion plans?
We saw huge consumer interest even before our launch with over 8.5 lakh users on the waitlist (to access the app).
Presently, we have over 3 million users and our aim is to bring wealth creation to many more with a special focus on first-time investors.
We are an investor-first platform, and all our products are aimed at ensuring simplicity, building transparency and providing maximum benefits to users.
We’ve already received approval from PFRDA for NPS, and from SEBI for stock broking services.
Both these products are highly under-penetrated and we expect to bring incremental users and expand the market.
Can you elaborate on stock brokerage services?
Our goal is not just to bring these products to end users, but also to raise awareness, and simplify the process of investing.
A large segment of prospective investors are apprehensive of engaging in stockbroking and our aim is to bridge the gap of unawareness and alter the notion of complexity.
Our platform is known for its simplicity and we intend to extend this to all our product offerings. We also released a pilot version of Paytm Money website.
Our intent is not just to offer investment options but to offer advisory services, insights and research reports.
What are the prevailing investment trends?
In India, investors are shifting from traditional avenues like real estate, fixed deposits and gold to alternatives like mutual funds, which saw a spike in recent years, thanks to investor education initiatives. AMFI (Association of Mutual Funds in India) data suggests that mutual fund industry saw an annualised growth of 19.51 per cent between July 2014 and July 2018 to stand at Rs 24.54 lakh crore.
MFs are no longer perceived to be for the rich and platforms like ours are democratising it by lowering the minimum investment amount to Rs 100.One major reason for the upward trend is also convenience and simplicity.
There has been a tectonic shift in investors’ mindset and we see increased engagement in direct plans as opposed to the regular plans of mutual funds.
Having said that, there’s a wide market untapped and our aim is to create a level playing field. We have under 20 million mutual fund investors and we think it should double in less than 4-5 years.
Why should investors wait for the right time to redeem money during market volatility?
Investors invest in mutual funds to grow their wealth and access funds when they want to. Investors must have a clear scope for investing.
If you seek liquidity and ease of access then investing in liquid or insta-redemption funds would be the right route.
However, if you are investing to meet certain financial goals, it is advised that you stay invested for longer duration.
There will, of course, be market volatility at regular intervals but making decisions based on those can be detrimental to the purpose of investing.
Staying invested for 10-15 years or more ensures that market fluctuations are neutralised over time. Sudden and unplanned exits can result in you losing out on higher returns when markets recover eventually.
What are your growth plans?
For now, we’ve started with one product, mutual funds. We intend to do more this year with NPS and stock broking, and have plans to add more.