Paytm has announced potential job cuts and plans to sell non-core assets following a significant decline in sales and net losses.
It resulted from a regulatory probe that impacted its operations.
The Indian fintech company reported its first-ever revenue drop since its stock market debut in 2021.
This was a 2.6 percent decrease to 22.7 billion rupees and net losses ballooning to 5.5 billion rupees ($66.1 million) for the quarter ending in March.
Established by Vijay Shekhar Sharma in 2010, Paytm was once a shining example of India’s startup success.
However, it has struggled to recover after a financial watchdog ordered a key banking affiliate to wind down in January.
It damaged Paytm’s reputation and caused customer defections to competitors like Walmart’s PhonePe.
Paytm plans to streamline its organization, reduce employee costs, and trim non-core businesses in response to these challenges.
Despite these issues, the company’s shares rose by as much as 2.8 percent, reversing earlier losses.
The Indian fintech company reported its first-ever revenue drop since its stock market debut in 2021
On Wednesday, Paytm reported profitability before interest, taxes, depreciation, and amortization, excluding employee incentives.
However, it warned of further revenue declines to between 15 billion and 16 billion rupees in the June quarter, anticipating “meaningful improvement” thereafter.
Paytm competes with financial services offered by Amazon, Google, and Mukesh Ambani’s Jio Financial Services.
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Its shares have lost half their value since the government halted operations at Paytm Payments Bank Ltd. (PPBL) for non-compliance.
Although not controlled by Paytm, PPBL was integral to its digital wallets and payments.
To stabilize the company, Sharma has forged new partnerships with major Indian lenders, such as Axis Bank, HDFC Bank, and the State Bank of India.
These alliances will enable Paytm to facilitate instant money transfers and clear merchant transactions through partner banks.
During the March quarter, Paytm lost about 4 million monthly transacting users and saw a sharp decline in loan disbursements from 155.35 billion rupees to 57.76 billion rupees.
