Uni Cards, a prepaid payment platform, on Friday announced the suspension of their services of its two products following RBI’s direction. In June, the central bank prohibited non-back prepaid payment instruments (PPIs) issuers from providing credit lines on PPI cards. Thereby, Uni Cards has decided to halt onboardings.
Speaking at the company’s first annual general meeting, Paytm managing director and chief executive officer Vijay Shekhar Sharma answered questions on the company’s depressed stock price, when the company’s shares will reach the issue price of ₹2,150, and when it will achieve profitability.
“There is a difference between a small company becoming profitable and a big company becoming profitable. Our ambition is to be a large-scale company and become profitable,” Sharma said, speaking largely in Hindi, in his response to shareholder questions on the profitability timeline. Paytm’s losses widened to ₹644 crore in the first quarter of FY23 from ₹380.2 crore in the corresponding quarter last year, although its revenue rose over 86% for the same period. Paytm shares closed at ₹771.85 on Friday, recovering 4.66% over the last month.
Sharma said the company was on track to becoming profitable by September 2023. “Till 2019, the company was focused on expansion, after which it focused on monetization through its payments and lending divisions,” Sharma said. He attributed the depressed share price to poor investor sentiment and macroeconomic factors, adding the firm did not have any influence in managing the stock beyond its focus on profits.
“From the shareholders’ letter, we see that the definition of profitability has been modified. We do not support companies redefining how profitability is determined to suit individual needs,” said Hetal Dalal, president and chief operating officer of Institutional Investor Advisory Services (IiAS).
Sharma obliquely addressed concerns over his remuneration by reiterating that his stock options that were granted in FY22 will not vest till the company hits the IPO market cap. Sharma’s remuneration of ₹796 crore, including stock options granted in FY22, was one of the resolutions put up for vote ahead of the AGM. Proxy advisory firms have questioned the grant of Esops to Sharma since he is practically a permanent director on the board and in light of Paytm stock’s abysmal performance.
Sharma is not classified as a promoter, but he is the founder of Paytm, owning close to 14% stock in the company, including through his family trust.
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