Fintech giant Paytm is all set to go for a massive initial public offering with plans to raise INR 21,800 Cr ($3 Bn) in the IPO by November this year. And one of the key strengths for the company is said to be its diversified business model as well as a clutch of experienced leaders from various financial services verticals, besides founder Vijay Shekhar Sharma.
The Paytm IPO is expected to be the largest public market debut in India in a year in which food aggregator Zomato and used cars marketplace CarTrade, epharmacy startup PharmEasy, beauty ecommerce brand Nykaa and insurtech startup PolicyBazaar are likely to list publicly. The Vijay Shekhar Sharma-led company is targeting a valuation of $25 Bn – $30 Bn, a big jump from its current $16 Bn valuation.
The much-anticipated public market debut will include a mix of new and existing shares to meet regulatory obligations in India, and offer partial exit to some existing backers. The company has shortlisted Morgan Stanley, Citigroup and JPMorgan Chase as advisors for this IPO, with Morgan Stanley as the top contender to grab the lead position. The IPO process is expected to start from late June or early July, as per reports.
The Key Leaders Driving Paytm’s Diversified Business
As per analysts, Paytm has shown financial discipline which is rare in the hyper-competitive payments and fintech space. Paytm is said to be on track to break even in 12-18 months and is expected to be a major force in the payments and fintech market because of its diversification.
One97 Communications operates Paytm Payments Bank Limited, Paytm General Insurance Limited, Paytm Life Insurance Limited, Paytm Money Limited, Paytm E-Commerce Private Limited, Paytm Entertainment Limited among other smaller entities. These combine to give Paytm a strong acquisition channel for its core business of payments and fintech services.
This diverse business model also called for a varied mix of domain experts and key vertical leaders to give Paytm an entrepreneurial edge across its various revenue streams. Since, the next milestone for Paytm would be to create value through building multiple businesses around the core Paytm brand, its recent hires and internal promotions since 2018 have come with strong domain experience in financial services and building scaled-up business verticals.
Research firm Bernstein states that Paytm also built a credible leadership team with credible industry experience across verticals. The company’s recent report said, “Paytm leadership has the right mix of domain expertise and entrepreneurial edge.”
Vijay Shekhar Sharma, Founder, One97 Communications
The founder of Paytm is one of the most followed tech entrepreneurs in India and has led Paytm through various phases of growth. Hailing from the small town of Aligarh, he graduated from the Delhi College of Engineering at the age of 19. His penchant for computers meant he had built his first company ‘XS Communications’, to create content management systems right in college.
Founded in 2000, One97 Communications started out as a prepaid and mobile recharge platform before Paytm was launched in 2010. Paytm is today one of the biggest digital payments companies in India with its offering spread across digital payments like UPI, credit and debit cards, wealth management through Paytm Money, banking services through Paytm Payments Bank and more.
Today, having grown Paytm to a $16 Bn company, Sharma holds directorships of eight companies Including Paytm Payments Bank Limited, Vss Holdings Private Limited, Vss Investco Private Limited, Paytm General Insurance Limited, Paytm Life Insurance Limited, Paytm Money Limited, Paytm E-Commerce Private Limited and Aryan Ayurveda Private Limited.
According to an MCA filing accessed by Inc42, Sharma’s compensation for FY21 and FY22 was INR 4 Cr including payments for lease, rent and accommodation. In FY2020, he took home INR 3 Cr along with allowances and other bonuses.
Amit Nayyar, President, Corporate Development And M&A
As part of the Paytm Group, Nayyar oversees operations across verticals. Nayyar was brought on board in August 2019 to expand the company’s footprint in lending, insurance, wealth management, and broking businesses. With over 17 years of experience, primarily in investment banking, he served as the Arpwood Capital MD, the executive director and co-COO of Goldman Sachs. He holds a masters degree in business administration from Indian Institute of Management, Bangalore (IIM B) and a Bachelor’s degree in Engineering from Punjab Engineering College.
Madhur Deora, President And Group CFO
In August 2019, Paytm elevated CFO and senior VP Madhur Deora to the position of president in a newly created role. He had joined the company in 2016 and led the dealmaking operations at Paytm before being named as the president.
Deora, a former investment banker, is responsible for all of Paytm’s consumer services business. He had led Paytm through multiple funding rounds and acquisitions. Verticals like games, movies, travel, deals and content will be headed by Deora, Paytm had said at the time of his appointment.
Before joining Paytm in October 2016, he served as Managing Director in Citigroup’s investment banking business.
Satish Gupta, MD & CEO, Paytm Payments Bank
Paytm hired Satish Gupta to lead the Paytm Payments Bank in 2018. He comes with over four decades of banking and payments experience having worked at State Bank of India, and with the National Payments Corporation Of India (NPCI).
Gupta took over the role from Renu Sethi, who now oversees offline merchant acquiring and is also a key leader for Paytm. Under his leadership, Paytm Payments Bank achieved an all-time high monthly target by opening over 1 Mn new savings and current accounts in March 2021, with the total number of bank accounts going up to 64 Mn. The bank also led the beneficiary banks on UPI platform in March and April.
Paytm has managed to keep its lead in this regard by offering the full stack for UPI payments by owning the issuing and beneficiary bank i.e PPB as well as the UPI app, unlike the two leading UPI apps Google Pay and PhonePe, which rely on third-party banks. This is most evident in the lower failure rate for Paytm when compared to the competition.
Praveen Sharma, Head of Online Payments, Advertising
Brought onboard in September 2019, Praveen Sharma joined Paytm from Google to lead the online merchant payments, advertising, and digital goods business. Sharma brings over two decades of experience in the media and marketing business with Google, Madison Media, GroupM and other companies.
At Google, Sharma was based in Singapore and responsible for driving the tech giant’s performance media across the Asia Pacific region
Bhavesh Gupta, CEO, Paytm Credit
With lending and credit becoming a core revenue stream for Paytm, it decided to name Bhavesh Gupta from Clix Capital to lead its credit business in August last year. Bhavesh comes with nearly 20 years of experience in lending having worked with Clix Capital, IDFC First, and ICICI Bank.
In his last role, he served as the founding member & CEO of Clix Capital, earlier known as GE Capital India, where he built a well-diversified NBFC in digital consumer and MSME lending along with urban affordable housing loans segment.
Varun Sridhar, CEO, Paytm Money
With its focus on investment tech growing, Paytm hired Varun Shridhar to lead its Paytm Money wealth and stockbroking platform. Sridhar led the launch and development of the equity brokerage other than growing the already successful mutual funds, NPS and gold investment services.
Before Paytm, he served as CEO of FinShell India where he launched mobile-first fintech services platform Realme PaySa along with electronics maker Realme. He was also with BNP Paribas for close to eight years where amongst other assignments he supported the acquisition of Sharekhan.
Vineet Arora, MD& CEO, Paytm Insurance
Hired in April 2020, Vineet Arora came on board to lead Paytm’s insurance business from Aegon India. Given the growth for the insurance sector in the post-pandemic market, the focus on insurance has allowed Paytm to take its foot off cashburn pedal on the payments side and allowed it to achieve balance. Arora has past experience with ICICI Prudential, ICICI Securities, and Aegon Life. He helped expand the ICICI Direct online portfolio.
Arora has a bachelor’s degree in mechanical engineering from the Delhi College of Engineering and a post-graduate diploma in business management from the Xavier Institute of Management in Bhubaneswar.
