Paytm news update:
On May 6, shares of Paytm experienced a decline of more than 4.5% following the announcement of the resignation of its Chief Operating Officer (COO) and President, Bhavesh Gupta, as revealed in a regulatory filing during the weekend.
As per the filing, Gupta conveyed his decision to step down through a letter, stating that his resignation would take effect from the conclusion of business hours on May 31, 2024. Nevertheless, he expressed his intention to continue supporting the company in an advisory role within the CEO’s office.
Gupta attributed personal reasons for his career break in his resignation letter, while also expressing confidence in company’s future trajectory. He acknowledged the strong leadership established in payments and financial services in recent years.
The company confirmed the acceptance of Gupta’s resignation in the filing, stating that he would be relieved from his duties as of the close of business hours on May 31, 2024.
Meanwhile, Paytm has announced the appointment of Rakesh Singh as the new CEO of Paytm Money, while Varun Sridhar, the current CEO, has been designated as the Chief Executive Officer of Paytm Services Private Limited (PSPL).
Both Paytm Money and PSPL operate as subsidiaries of Paytm’s parent company, One97 Communications, offering services such as stockbroking, mutual fund investments, and other wealth management products to company customers.
Bhavesh Gupta’s resignation precedes company scheduled announcement of its fiscal year 2024 March quarter results. There is widespread anticipation that these results may reflect the impact of regulatory restrictions imposed by the Reserve Bank of India (RBI) on its associated entity,PPBL.
In the previous quarter, company demonstrated robust revenue growth driven by its loan distribution platform, a business segment known for its high margins. Approximately 20% of the company’s revenue and 25% of its margin were attributed to commissions from the lending platform.
However, following the RBI’s ban on PPBL, the company suspended its lending activities for over a month. This pause is expected to have a more significant impact on both the company’s revenue and profit margins than initially projected during an investor conference call.
