NEW DELHI: Paytm founder and CEO Vijay Shekhar Sharma believes that his fintech firm should achieve operating EBITDA breakeven in the next 6 quarters, well ahead of estimates by most analysts. Sharma, in a letter to investors, said that they are going to achieve this without compromising any growth plans. By operating EBITDA, the company means EBITDA before ESOP (employee stock ownership plan) cost. Sharma, in a letter to investors, said that they are going to achieve this without compromising on any growth plans.
Sharma’s address comes two weeks after share prices of Paytm had crashed to an all-time low of Rs 521 as against its issue price of Rs 2,150. The fall in Paytm share prices has been so steep that the Bombay Stock Exchange (BSE) last month had to seek a clarification from the company about it.
Sharma said, “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.”
He added that his stock grants will be vested to him only when Paytm’s market cap has crossed the IPO level on a sustained basis. This means to reach the issue price again, the stock will have to rally about 340%. PayTm’s current m-cap at around Rs 41,000 crore is nearly `1 lakh crore lower than its pre-listing m-cap. PayTm had debuted in the equity market in November last by launching India’s largest IPO.
Brokerage firm Macquarie which first predicted its target price correctly recently slashed the same to Rs 450, down by 36% as compared to Rs 700 it had predicted in February. “Recent development significantly reduces the probability of getting a banking licence to lend and other regulatory headwinds include the digital payments paper potentially capping wallet charges and tougher buy now pay later and KYC regulation,” it said citing RBI’s decision to suspend Paytm Payments Bank from on-boarding new customers.