Paytm share price: Shares of One97 Communications, the parent company of Paytm, saw a 2 per cent increase during early trading hours after CEO and founder Vijay Shekhar Sharma reiterated the company’s intention to reapply for a payment aggregator (PA) license with the Reserve Bank of India (RBI).

Sharma confirmed in a statement, “We will apply for a payment aggregator license to RBI in due course.” 

Recently, Paytm received approval from the Ministry of Finance to invest in its payment services business. According to a company filing, “PPSL has received approval from the government of India, Ministry of Finance, Department of Financial Services, vide its letter dated August 27, 2024, for downstream investment from the company into PPSL.”

With this approval, Paytm Payments Services Limited (PPSL) plans to resubmit its application for a PA license. In the meantime, the company will continue providing online payment aggregation services to existing partners.

Paytm’s earlier application for a PA license was rejected by the RBI in November 2022, with instructions to reapply in compliance with Press Note 3 under the foreign direct investment (FDI) norms. Press Note 3 mandates government approval for investments from nations that share land borders with India.

Paytm’s path to profitability

At Paytm’s Annual General Meeting (AGM), CEO Vijay Shekhar Sharma also emphasized the company’s commitment to achieving PAT (Profit After Tax) profitability.

“India stands at a stage where the whole world is talking about the country’s payments and its digital revolution,” said Sharma. “We, as a nation, have leapfrogged to become leaders in financial technology, and now we have the opportunity and obligation to extend that leadership into AI technology. Paytm is committed to lead the industry with our advanced AI capabilities.”

Sharma explained that Paytm now focuses on its core businesses—payments and financial services distribution. The company also sees the potential to reduce costs by incorporating AI technology into its operations.

Sharma added that the board had advised shifting focus from EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) before ESOP (Employee Stock Ownership Plan) to PAT as a more comprehensive measure of the company’s financial health. “Our commitment is now to focus on PAT, reflecting our drive towards true profitability,” Sharma said.

Despite these plans, One97 Communications reported a wider consolidated net loss for the first quarter of FY25. The Q1FY25 net loss expanded to ₹839 crore, more than double the ₹357 crore loss from the same period a year ago, primarily due to the impact of RBI-imposed restrictions on its payments bank business.

Revenue from operations dropped 36 per cent year-over-year to ₹1,502 crore in Q1FY25, down from ₹2,342 crore in the corresponding period last year.

In response to rising losses, Paytm has implemented cost-cutting measures, including plans to save ₹400- ₹500 crore annually in employee-related expenses. The company also reported a reduction in ESOP costs, which fell to ₹247 crore, as many stock options lapsed due to layoffs and resignations.