Domestic institutional investors, led by mutual funds, have expanded their stake in Indian fintech giant Paytm. According to the latest shareholding data filed by the company, mutual funds have increased their stake by 1% in the second quarter of FY25.
Mirae Asset and Nippon Mutual Funds are the key players in this increased stake, holding 4.49% and 2.27%, respectively. The rise in domestic mutual fund investment reflects growing confidence in Paytm’s business model and potential for future growth.
Analyst Reports Highlight Paytm’s Growth Potential
Dolat Capital, in its recent report, emphasized Paytm’s strong position in India’s digital payments landscape. The report noted stable UPI market share, a resilient merchant base, and growing partnerships as key drivers of Paytm’s success. “Paytm remains in a bright spot of continued rapid growth in digital payments in India,” Dolat Capital mentioned, predicting multi-fold revenue growth for the company over the next decade with steady profitability expected from FY26 onwards.
Similarly, Emkay Global projects strong growth and profitability for Paytm. The firm estimates that Paytm is on track to achieve annual revenues of approximately Rs 100 billion by FY28, with a surplus of Rs 25-30 billion over operating costs.
Brokerage firm Ventura recently initiated coverage on Paytm with a target price of Rs 1,170 over the next 24 months. Despite regulatory challenges faced by its associate Paytm Payments Bank (PPBL), analysts at Ventura expressed confidence in Paytm’s business model. They noted that Paytm’s soundbox and POS systems are becoming essential tools for digital payments, positioning the company to benefit from the continued growth of UPI.
The report also highlighted Paytm’s adaptability to regulatory changes, its technological capabilities, and its strong relationships with merchants and Monthly Transacting Users (MTUs) as key factors for sustained growth.
Financial Performance and Future Outlook
In Q1 FY25, Paytm reported operating revenue of Rs 1,502 crore and a balance sheet with Rs 8,108 crore in cash. The company expressed optimism about future revenue and profitability, driven by factors such as growth in Gross Merchandise Value (GMV), an expanding merchant base, recovery in the loan distribution business, and cost optimization efforts.
Paytm has reiterated its commitment to focusing on its core payments and financial services business, leveraging the expanding digital economy for sustained growth.