From cleanup to comeback: Why investors are backing Paytm again

Down 20%. Then another 20%. Then 10% more. That was the bruising reaction from shareholders across three straight trading sessions in early February 2024, after the Reserve Bank of India (RBI) dropped a regulatory hammer on Paytm Payments Bank. From February 29, the bank was barred from accepting deposits, facilitating wallet top-ups, or handling credit transactions—effectively putting a stop to nearly all of Paytm’s core financial operations.

For Paytm, the crackdown struck at the heart of its business. And investors, unsurprisingly, bolted.

It wasn’t the first time the public markets had turned against the company. Since going public in November 2021—with what was then India’s largest-ever IPO—Paytm has had a bumpy relationship with investors. The Rs 18,300 crore offering had valued the company at $18 billion, despite it ending FY21 with just Rs 2,800 crore in revenue and steep losses. That pegged its revenue multiple at over 46—the kind of math that might have flown in frothy private markets but was a tough sell on Dalal Street. Even Paytm founder Vijay Shekhar Sharma later conceded that the company may have misread the room and picked the wrong advisors for the IPO.