Paytm Breaches Rs 1 Lakh Crore Valuation, Beats HDFC, Bajaj, Godrej; But Losses Equal Bullet Train Budget
Share prices of Paytm in the unofficial market has jumped 60%
Made in India mobile wallet and Payments Bank Paytm has breached yet another major landmark: It has now crossed Rs 1 lakh crore ‘unlisted’ valuation, banking on the tremendous momentum generated by Walmart.
Meanwhile, we should also tell you about Paytm losses, which has been consistently increasing: Now, the losses by Paytm Mall has equaled entire budget of India’s maiden bullet train.
What exactly is happening with Paytm here?
Paytm Breaches Rs 1 lakh crore Unlisted Valuation
In the unofficial investments market, Paytm shares were trading for Rs 18,200 this week, which is a jump of 60% compared to September.
This massive jump in ‘shares’ of Paytm has enabled the company to breach Rs 1 lakh crore valuation mark, for the first time ever.
This way, Paytm has now beaten market-cap of listed companies like IndusInd Bank, Mahindra & Mahindra, Bajaj Finserv, Titan, HDFC Standard Life Insurance and Godrej Consumer.
With a paid-up capital of Rs 55.32 crore and price of Rs 18,200 per share, Paytm is now currently valued at Rs 1,00,975 crore.
How Did This Happen?
In August this year, Warren Buffett’s Berkshire Hathaway had decided to invest in Paytm, which proved to the trigger for this massive ‘unlisted’ valuation of Rs 1 lakh crore.
Berkshire Hathaway has invested $300 million into Paytm, thereby acquiring 1,702,713 fully paid-up equity shares in the company, at around Rs 13,500 per share.
Not a very huge investment, agreed, but the momentum created by this investment has shot up the value of per share in Paytm, in the unofficial market of investments and equities.
From Rs 13,500, the value of each share of Paytm has now increased to Rs 18,200, as per ‘four brokers dealing with the unlisted shares.’ (reported by ET)
But Losses At Paytm Mall Soars At The Same Pace
While Paytm’s success is unprecedented, losses at its sister concern Paytm Mall is widening to a massive scale now.
As per the latest reports coming in, the losses by Paytm Mall is now equal to the entire budget of India’s 1st bullet train.
Last year in February, Paytm had spun off its ecommerce marketplace into another company, called Paytm Mall which was fuelled with 68 Million Products & 14000 Sellers On Day 1.
As per a report by Kotak Research, Paytm Mall suffered a loss of Rs 1806 crore during FY2018, which was same as the budget of India’s 1st bullet train, which is Rs 1800 crore, as announced by PM Modi.
Between FY 2016 and FY 2018, Paytm Mall’s combined loss amounted to Rs 1971.04 crore ($282 million), which is around 44% of total funds raised by Paytm.
This loss of Rs 1800 crore is very less, compared to Flipkart and Amazon India’s losses in India: Flipkart generated loss of Rs 8770 crore last year, while Amazon India suffered loss of Rs 6200 crore last year.
Ecommerce observers are now waiting for the real purpose, due to which Paytm Mall was actually launched: Enabling the grand entry of Alibaba in India.
We will keep you updated, as more details come in.