图片来源：PUNIT PARANJPE—AFP/GETTY IMAGES
Vijay Shekhar Sharma addresses an audience while wiping tears from his eyes on the stage of the Bombay Stock Exchange on November 18, 2021. His company, One97 Communications, has just completed India's largest-ever initial public offering (IPO), raising $2.4 billion, catapulting Sharma and his company to the stardom of India's tech scene.
One97 Communications因其母公司Paytm而广为人知。 优步（Uber）和印度铁路服务公司（Indian Railway Service）都使用Paytm的支付服务。 马云旗下的阿里巴巴（Alibaba）和蚂蚁集团（Ant Group）、孙正义（Masayoshi Son）旗下的软银（Softbank）和沃伦·巴菲特（Warren Buffett）旗下的伯克希尔-哈撒韦公司（Berkshire Hathaway）等知名投资机构都支持该公司。
Paytm's final piece of good news is the initial public offering.
The company is not yet profitable. Since going public, One97's share price has fallen by more than 70%. Whether it's out of concern about Chinese players or a plunging share price, SoftBank, Alibaba and Berkshire Hathaway have sold most, if not all, of their stakes. In the payments space, Paytm faces stiff competition from Google and Walmart's Flipkart. Analysts now see the company as a prime example of speculation leading to overvalued listings. [Paytm also lost its title as India's largest IPO, which was replaced by the IPO of India's state-owned Life Insurance Corporation in May 2022 ($2.7 billion)] ]
Now, the regulatory crackdown threatens Paytm's entire business model, banning it from operating lucrative banking and mobile wallet services.
在印度《经济时报》（The Economic Times）前执行主编、《滑落神坛、处于劣势和蹒跚而行：印度金融业改革不为人知的故事》（Slip, Stitch & Stumble: The Untold Story of India’s Financial Sector Reforms）一书的作者拉杰里什·辛格尔（Rajrishi Singhal）看来，Paytm的衰落源于初创企业普遍采用的不惜一切代价追求增长的模式。
"Paytm has always been aggressive and pushing the envelope, and that goes back to its early days as a start-up, when revenue was more important than margins or profits," he said. Paytm is slightly dismissive of the regulatory framework. ”
In a statement to Fortune, Paytm said, "Compliance has been a cornerstone of our product development program from the beginning. Without the necessary approvals, we can't bring products to market, while ensuring that every new product is both innovative and fully compliant with regulatory standards. ”
However, the regulatory crackdown – perhaps to avoid the risk of any financial crisis ahead of April's crucial national elections – has called into question the future of the once-high-flying startup and could wipe out much of the company's pre-tax profits.
What happened to Paytm?
On January 31, the Reserve Bank of India charged Paytm Payments Bank, an affiliated financial institution that holds all the funds in Paytm's digital wallet, with "persistent violations" and ordered the financial institution to stop accepting new deposits.
Subsequently, on March 1, India's Financial Intelligence Unit fined the bank $660,000 for using funds for illegal activities such as online gambling.
Paytm acted quickly to cut ties with the payment bank. Last week, Sharma resigned as chairman of the bank's board. Paytm is currently trying to establish partnerships with third-party banks such as Axis Bank.
The company confirmed that it will continue to provide payment services after March 15. March 15 is the deadline for the Reserve Bank of India (RBI) to ask Paytm payment banks to cease operations.
At a conference in Tokyo, Sharma said advisors could be blamed for Paytm's woes. According to Bloomberg, he said: "The most important thing I've learned is that a lot of times teammates and advisors can also misunderstand...... It's important to solve the problem yourself rather than having a teammate or advisor suggest you how to solve the problem. ”
Without a paying bank, Paytm is limited to facilitating deals, which is a business with "no source of income," Singh said.
Immediately after the RBI issued the ban, Paytm filed a stock paper warning that the executive order to shut down Paytm's payment bank could drag down the company's EBITDA by up to INR 5 billion to $60.4 million at the current exchange rate. For the nine months ended December 31, 2023, Paytm generated EBITDA of $55 million.
But Sharma may not have a choice in this matter. "If he wants Paytm as a brand to survive, it will have to survive as a unified payment interface (India's nationwide instant payment system) because Paytm cannot survive as a wallet or a bank," Singh predicts. ”
Paytm is the latest startup in India to stall. Edtech company Byju's was once India's most valuable startup, with a market capitalization of $22 billion at the end of 2022, but the startup is now facing charges of false numbers, toxic work culture, unethical sales practices, and defaulting on debts. (The company has denied all allegations.) On Feb. 23, Byju's shareholders voted to remove CEO Byju Raveendran. But he refused to step down.
Poor timing
Regulators have been eyeing Paytm and its payment banks before. The payments bank has been unable to sign up with new customers since March 2022, and in October last year, the Reserve Bank of India fined it $650,000 for failing to comply with "know your customer" requirements. Then in November, Paytm was officially banned from signing up with new merchants.
The action against Paytm is part of India's broader crackdown on the financial sector, particularly "shadow banking" (i.e. financial institutions outside the traditional financial system).
Indian voters will begin voting in the national elections in April. India's ruling Bharatiya Janata Party and Prime Minister Narendra Modi will use India's strong economy as a campaign chip. Most analysts expect Modi to win a third term.
With the Indian market booming and regulatory concerns, financial companies are asking for trouble.
"A financial crisis is bound to turn into a political crisis," Singal said. I think [Paytm] is a risk that the political system can't take. ”
The situation reminded Singal of India's early financial scandals, many of which he covered during his time as an Indian business journalist and mentioned in his book. For example, in the early 90s of the 20th century, Harshad Mehta, a trader nicknamed "The Big Bull", defrauded banks to finance speculative stock market bets. Singer said that in the exciting environment of the time, traders like Meta "didn't know when to say no and when to withdraw".
Will India's bull market now plant the seeds for another scandal?
"The financial industry is not known for its history," Singal said. (Fortune Chinese Network)
作者：NICHOLAS GORDON
Translator: Zhong Huiyan-Wang Fang
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