Market fears appear to be reflected in this report
âMigration of merchants taking timeâ.
It was already expected.
Whatsapp also trying to take advantage of paytm crisis. Its nudging to use its upi from past 2-3 days. It never did this before
Arenât PPBL and PayTM different entities? Shouldnât we consider these headlines about PBBL as noise for investors of PayTM? Iâm just trying to understand the bottom-line impact.
PPBL is a JV between VSS and one97 communications (the co which owns paytm). Also there is a tight integration between the two. Wallet, Fastag, UPI etc are provided by PPBL. So if PPBL is affected, Paytm cannot be unaffected.
Financial Intelligence Unit-India (FIU-IND) imposes penalty of Rs 5,49,00,000 on Paytm Payments Bank Ltd with reference to violations of its obligations under PMLA. I donât know the details. Can anyone educate about seriousness of the issue, if any.
read original order hereâŚ
Fine amount is high. Said so in past FIU imposed fine (In lakhs) to many banksâŚ
https://www.business-standard.com/article/finance/fiu-imposes-rs-68-lakh-fine-on-banks-for-failure-to-file-strs-115101100187_1.html
Paytmâs UPI transactions dropped in February by 7.6% compared to January 2024, that is, 1.33 billion transactions from 1.44 billion transactions.
This article talks about NPCI doing due diligence whether to take any action. But what is it? was there any news about anything from Paytm that is not compliant with NPCI?
NPCI doing due diligence for TPAP license as Paytm payment bank canât act as PSP after 15th Mar for PayTM so Paytm needs to find another bank to act as PSP and get TPAP license. Thanks!
Basis above news report, PAYTM has got the TPAP license
Anyone still tracking.
I couldnât get around some details.
~8000 crores cash and cash equivalents.
Negligible debt.
I know that employee expenses are high but one cannot ignore the cash.
Great product.
Donât say that it is not a market leader.
Being 2nd or 3rd best is also great in Indian market.
What am I missing??
âA company cannot go bankrupt with negligible debtâ
- Peter lynch.
Negligible debt so maybe no bankruptcy, but when business verticals are stopped, issues exist, a company may slowly wither away, or languish for years. Some may exit, some may see value and enter.
Institutions have both sold and bought, including fresh purchases since the fall. Price is making lower highs, and I think price will react in accordance with news.
Not invested, just some random thoughts, was a satisfied user of their services, waiting for the services to resume.
âA company cannot go bankrupt with negligible debtâ is apply to old time manufacturing company. It is not applied to technology company. Company can not servive without proper business model.
For paytm case, Market just lost faith on paytm Management. Company have some good product but doesnât have any moat and lotâs of problem with regulator. And market still give 25000cr marketcap(its huge for many companies). For current situation,I think its fair.
Cash is cash whether manufacturing or a tech company. Even the old time manufacturing company will perish if there is no demand for its product.
It still holds major market share on merchant side. Coming to moat- It do enjoy some network effects.
It has a very good wealth management application , which is growing. If some cannot value itâs business model - no bookmyshow, makemytrip, easemytrip etc cannot be valued as well. It also has a Japanese pay pay which is valued at ~3.5 k crores.
Why are we just treating it like a failed venture.
Coming to 22k crore valuation - come on guys capital intensive commodity businesses with no moat at all are trading at 3x price to sales.
Anyways, I may be completely wrong. Thanks for respondingđ.
If you really think itâs undervalue, add just 2% of portfolio. This is not stock when you can add 10 % or 20% of portfolio. And you need to constantly watch managementâs decision. This is not buy and hold stock because many things you can not predict or control.
I took a position after the RBI ban. As assymetrical an opportunity as they come so couldnât resist.
My thesis is that the payments bank is screwed but the major play was never the bank anyway. If it recovers, great but even if it doesnât, I see them just partnering with other banks and insurance companies and do BAU just like they did with their own bank earlier. Their strength is the app and the active users along with the 5mil active sound boxes that they have. The data that comes with it is gold and provides opportunities for both cross sell and targeted advertising.
One to closely track over the next year to see if itâs the right call but with the cash on hand and the market cap being what they are, the downside is limited imo.
Disc - Invested.
What is the cash and cash equivalents position? I think 8000 cr. figure is of last year