Paytm's net loss surges in Q1FY25 due to RBI restrictions

19 Jul 2024 , 11:32 AM

One 97 Communications, the parent company of Paytm, reported a significant widening of its consolidated net loss for the first quarter of FY25. The fintech giant’s net loss surged to ₹839 Crore, up from ₹357 Crore in the same period last year. This dramatic increase is primarily attributed to the crippling restrictions imposed by the Reserve Bank of India (RBI) on its associated entity, Paytm Payments Bank Limited (PPBL).

Decline in Revenue

Paytm’s revenue from operations saw a substantial decline, dropping 36% to ₹1,502 Crore in Q1 FY25, compared to ₹2,342 Crore in Q1 FY24. This downturn reflects the challenges the company has faced in maintaining its operational performance amid regulatory constraints.

Impact of RBI Restrictions

In January this year, the RBI placed significant restrictions on Paytm Payments Bank Limited, impacting the fintech firm’s overall business operations. The RBI’s measures have severely constrained PPBL’s ability to operate effectively, leading to financial setbacks for Paytm.

Share Performance

At 11:26 AM on July 19, Paytm shares were trading 0.92% higher at ₹449.40 apiece.

Previous Write-offs

Paytm had previously written off ₹227.1 Crore worth of investments in PPBL, accounting for these as impairment losses. This move was necessary to reflect the diminished value of its investment following the RBI’s regulatory actions.

Key Figures

• Net Loss: ₹839 Crore (Q1 FY25) vs. ₹357 Crore (Q1 FY24)
• Revenue from Operations: ₹1,502 Crore (Q1 FY25) vs. ₹2,342 Crore (Q1 FY24)
• Share Price: ₹441 apiece, down 1% as of 11:10 AM on July 19