Paytm is India's leading payments and FinTech enterprise - it offers payments, financial services, commerce, and cloud services to its large consumer/merchant base of ~333m/~21m. Paytm is the largest payments platform, with GMV of ~Rs 4t reported in FY21 (~33% CAGR over FY19-21).

The company was launched in CY09 as a 'mobile-first' digital payments platform to enable cashless payments to consumers. It started off as a digital wallet-based platform initially, with a focus on mobile top-ups and utility payments.With the advent of technology,

Paytm has created a payments-led 'super app' and evolved into a comprehensive payments ecosystem, covering payments, credit, insurance, merchants, wealth management, e-commerce services, and so on.The key opportunity for Paytm is to monetize its large installed customer/ merchant base (~333m/~21m) for broader financial service offerings, such as credit, wealth, and insurance.

Motilal Oswal Institutional Equities said, "We expect the contribution of these financial services in the total revenue to increase rapidly as the cross-sell rate improves. Paytm Postpaid is expected to provide a revolving credit line through the 'Buy Now Pay Later' facility for its existing customer base to aid spending on its ecosystem app."

"Media articles suggest Paytm's valuation would range at USD20-25b. As this fair value, we estimate implied P/Sales multiple on a consolidated basis would trade between ~14x-18x FY24E," it added.

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