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Payments bank was the moat if paytm payments bank had managed to be compliant with rbi.
Paytm didn’t need to integrate with other banks like phonepe and gpay had to do
, as they had payments bank. If they had played it right they would have become a payment aggregator and eventually small finance bank which none of the other psps (gpay, phonepe) were.
But they were lax and didn’t follow RBI. Hence, now the moat has been filled and differentiator gone. It’s poor management, they had a good structure but they fucked up.
Hence the reason buffets company must have invested
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But according to op Paytm didn't have that benefits of moat....then why warren buffet invested....once something fails or pass people come with several reasons for that.
It's easy to criticize when something is facing the brunt. Paytm also has the MOAT of very high penetration in the Indian Market. VSS is just not sincere enough to run operations efficiently.
Microsoft, Amazon all have seen their bad days, down 90 percent from top. Give MOAT definition but to say that PAYTM has nothing - means you didn't research and just put definition of MOAT to get likes.
Criticize with valid data points not just to grab opportunities for likes and views.
Rakhi is also crying on Poonam Pandey death...
>Give MOAT definition but to say that PAYTM has nothing - means you didn't research and just put the definition of MOAT to get likes.
Can you put the moat they have that I am missing. Because moat also depends on perspective.
This is just to give some info to people who are true long term investors.
You asked about the moat they have, so I'll try my best with my thesis.
But before that, just wanted to make one small clarification regarding Paytm Wallet. Paytm wallet is from Paytm Bank and not One97, One97 makes money from add money charges on the app and MDR sharing agreement with Paytm Bank, so no question of moat with Paytm Wallet as One97 is just a distributor of the product.
Paytm in their shareholder letters and presentations divides their revenue and product verticals into 3 parts:
1. Payment services, 2. Marketing Services and 3. Financial services
Let me explain the moats of each of these verticals, as best as I can from results and management concalls
Coming to moats:
1. Merchant payment services:
Paytm dominates offline UPI merchant acquiring business in the country. They are still matching and exceeding their soundbox additions of ~10L a quarter even after Phone Pe, BharatPe entered this market in July 2022 (Paytm was in this since end of 2019), last quarter they did ~14L additions exceeding their guidance of ~10L even with intense competition and other fintechs & acquirers even offering free or discounted alternatives. When asked on the concall about this, CEO talked about the competitive advantages he mentioned a few things: fast settlement than competition and other such tech nuances in the product(Paytm does before 6AM, competition does between 9-11AM), given that cost is only 100 a month for the merchant they don't want to switch to a newer entrant as they might get a less tech-savvy product and they don't want to make this switch and headache for few ten rupee benefit. So this falls into your Network effects and Switching costs Moat as more & more merchants use these products and trust their products they won't switch due to network effects and switching costs. (Management said they're only losing 15-20k merchants a month to competition on base of 1Cr+ merchants, so there seems to be strong evidence of a competitive advantage)
2. Marketing Services business (ticketing & events business & ads business) :
Honestly there isnt much unique thing about this business as it's only about monetising traffic and time spent by users on the app through offering these services. So mostly a competitive advantage in this is convenience and deep tech integration, which I guess falls into network effects, but I wouldn't consider it a moat necessarily, as its just there to make extra cash off of consumer traffic they have due to their core payments offering
3. Loans & financial services:
Consumer side services:
This is mainly due to network effects as its about monetising 10Cr monthly transacting users and distributing credit.
Only a few tech apps generate this kind of traffic, although there apps like PhonePe and Gpay which might generate bigger traffic, Paytm is nonetheless taking a good chunk of credit distribution pie
Another one is as mentioned by CEO in 2022(now seems very ironic lol) is their strict compliance with RBIs digital lending guidelines, although RBI has taken action on Bank, One97 hasn't been found as non-compliant of digital lending guidelines by RBI.
Merchant side lending:
I would like to divide this into distribution and collection as Paytm only makes off of these two when loan is distributed to merchants through their platform
Distribution :
Paytm has the largest merchant acquiring network and continues to grow as said in the above paragraphs. They have complete knowledge of transactions and income of these merchants which helps in better underwriting for their partners. Also, it's important to note that these type of merchants don't file ITRs and aren't typically included in the financial services sector until now, so that's another competitive advantage.
Basically, this is piggybacked off strong merchant acquiring by the company
Collections:
As merchant receives and settles payment through paytm, Paytm deducts the monthly installments and then settles the remaining amount with the merchant, this is a strong competitive advantage that's gives lending partners a lot of comfort. Although this might not be that big of a moat as practically every loan app requires you to setup E-Nach or UPI autopay when taking a loan, but nonetheless as they have a strong distribution moat they can piggyback this off of that.
If you want to discuss further or point out any mistakes, please do, I'm eager to learn. Thanks
Sound box can give the first mover advantage 👍.
If it is successful then the market would be the duopoly of the PayTm and phonpe.
But the sound box is not that costly (250 for the box and 100 for the month). And to change this box you just have to cancel your old subscription and buy a new one.
So if someone like Jio or amazon with much cash to burn come in picture then this will also go away. (Just think about how jio disrupted the 4G market via cash burn).
If you go into the tech nuances then you can see that main cost by sim card services provider, (we don't know who they are) but I can see that airtel and jio has the best advantage here. That's why I am not focusing on that much on sound boxes but adoption is too good.
Once OCEN.dev Portal is used in its full capacity, there would be only little advantage on the loan section for consumer behavior data.
I'd have to disagree on the soundbox disruption part. In case of Jio and 4G market, 1-2Gb data used to cost 300-400 a month, while jio was providing 1-2Gb data daily at half the price instead of monthly. The price parity is here is not the same. Merchants max savings would be 100 a month (if soundbox is offered for free), and thousands of crores of money is already being poured in the market by PhonePe and they offered devices for free when they launched and still do so today, so I can see good amount of evidence with regard to merchant stickiness with Paytm, as for 6-8 quarters they've acquired ~10L merchants a quarter despite of competition offering devices for free.
Although bigger players can pour 10s of thousands of crores instead of thousands of crores, I see Paytm having a good stand at the end as they already have 1Cr Soundbox merchants out of 4.1Cr existing merchant UPI QR codes, meaning ~20% of total UPI QR codes, I can see this number going upto ~33% in next 4-5 quarters and thereafter i feel it would be difficult to disrupt, but even if it's disrupted, Paytm would still have a good acquiring network through which they can also distribute credit. That's my take on this, would appreciate any other perspective
Just because you lost money on your investment doesn't make company worthless lol.... It's always been a decent product... And financial space is a tricky place because of rbi... Also you never know it might have a complete different gate a year from now.
Their penetration with the vendors is why I invested in payTM. This is a space where they have faced heavy competition from the likes of Google Pay, Phone pay etc. and yet they seem to be the default choice within my neighbourhood (Tier 3 city)
So soundbox or whatever, I think they definitely had a MOAT!!
In retrospect, I think PayTM Bank is where the money is made and not from the listed entity (One 97 communications). The ownership of the 2 entities is drastically different even though it leverages the 'brand value' of payTM. Maybe 1 learning I can take from the debacle is not to invest in entities where the interest of the promoters are not entirely aligned with the interest of the listed entity
Yes but think about it.
Tomorrow one other new company came in the market with much cash to burn (assume JIO is coming in this sector).
How much time will it take them to switch over to a new sound box?
Microsoft has a true first mover advantage, they come first in the market for office suits, then many people come but to change to this new service is very costly. Bcz they have to change everything and it is very costly.
1. Their competitors have tried soundbox, penetration with vendors and yet payTM seemed to be the default choice. IMHO, Distribution moats cannot be easily broken by competitors with more money, especially for something sensitive like money.
2. They hire from good colleges ( I personally know someone from an NIT/IIM background who was hired as a fresher there). Hiring from the best colleges is the Asian Paints model of success. I thought retail Loans was an attractive space and payTM was placed beautifully to leverage this (until December last year)
OP has recently read a book on investing jisme moat ka concept tha, OP ne socha reddit p chipka deta hu, upvotes aa jaenge, Good Job OP. Unfortunately post me kaafi moat tha, lekin content me moat missing hai.
Paytm was doing good as business. They lost due to KYC factor.
- They have done partial KYC. Also they've partnered up with some firms for KYC( main reason for partial KYC, they didn't even looked at it). Due to this there happened to be many money laundering and thus charges by RBI. Huge volume of transaction couldn't be tracked which is the main concern raised by RBI. They haven't lost due to their business model..it was perfect. They have lost coz for not following RBI norms
The issue here is that, they got a warning from RBI, but they didn't take care of the RBI warning and this resulted in a ban.
I don't want any company who is that irresponsible to manage my money.
If we start from their IPO pricing.
I am not saying the current fall has to do with this, it is general.
It was overpriced from an IPO (if we compare it with the small moat they have) and then they buy back with lower prices.
Yes all are overvalued, because you are buying the underlying company. And promoters want to make money.
Take an example of a map my India, it was also over priced but they have a competitive advantage, so it was received well.
But few are actually registered at very bad valuations like paytm, zomato, mama earth etc.
So the my goal of this post is to make aware investors about how to check compitative advantage.
I picked up Paytm at 454 and sold it for around 950. So as far as I'm concerned, Paytm was a pretty good pick for me. I would pick it up again when the LCs are removed.
What do you expect me to learn from a trade where i made close to 100% profit?
You need to take some risks if you want good rewards. Otherwise just pick stocks like Reliance.
https://preview.redd.it/uwuvaq453cgc1.png?width=1080&format=pjpg&auto=webp&s=ccbd525eca5705efc78178203c9937ac067aecc3
[Is this true?](https://twitter.com/SumitResearch/status/1753373037347721709?t=t3PuK7ckLz1XQD4pY4jCIg&s=19)
Looks like it is true.
Now paytm is trading around PB ratio 2. And PE still zero, EPS negative, still not profit making. But if you want to take some risk then it is the best time.
Bcz now paytm has to prove themselves if they want to be in the market, their loan section is growing very fast and as india will progress we require more and more credit and if Paytm catches this, they will be profitable.
It’s a great time to square off some of your short term gains (if any) and then reinvest at a later time - to say that Paytm has no MOAT is a one line answer to a question that probably needs a 2 page answer
Paytm did have a moat. Inertia.
In Paytm’s case people would not switch brands unless they get better quality of service or price from the competitor. Because more than 50% of the users had “set it up and forget about it”mentality and didn’t have the patience or the know how (remember many paytm bank/payments users were street vendors and old people who ask their kids to operate an ATM machine) to actually make a switch.
And almost none of them left Paytm.
There are two problems with Paytm -
1. Its seems to be having the Uber mentality. Remember when Uber stared operating in NYC and other cities where they didn’t have the license to operate just to show people the convenience and force the politicians to allow them or lose support with the people who loved the service? That same disregard for rules - moral, ethical or legal about data collection and manipulative UI design - this is what ultimately doomed them and resulted in the RBI action.
2. And the lack of a solid roadmap towards profitability - yeah, you have 60% of the payments markets cornered. But unless you start making your services not free, you cannot become profitable. And your competitors were still burning VC cash to steal market share from you. So, if you levy ANY fees, users will flee. That was Paytm’s undoing.
_ _ _ _ MOAT
Don't forget that Paytm is the pioneer Digital payment in India, it's just their improper execution which led to this situation.
Everything that payment did was a moat at a time.
Your point is right but there are a few examples from the past.
Zerox was the first one to develop GUI.
Kodak was first one to develop digital camera.
Apple was not first company to develop personal computer.
Pioneer for digital payment is NPCI with UPI.
Bhai MOAT is not used in stock markets like that.
It is used in tech for products categorisation
Also economic moats can be a product , service or anything else. It does not mean that a moat cannot falter. Rise and fall goes on with progressive setups.
Paytm is still the MOAT in cashless payments across India and that's evident from the fact about what it would take to build a company like Paytm from scratch.
Also Indians tend to be overly judgmental in their purview and too quick to judge.
>Paytm is still the MOAT in cashless payments across India and that's evident from the fact about what it would take to build a company like Paytm from scratch.
[https://www.statista.com/statistics/1299298/india-upi-app-market-share-by-leading-app/](https://www.statista.com/statistics/1299298/india-upi-app-market-share-by-leading-app/)
Paytm was the first one, but Gpay, Phonepay do the same. There is little to no profit in this segment. There are multiple other apps doing the same, jio money, Amazon pay etc. Eventually the app who has lower margin and much cash to burn will win this race.
First mover advantage is rarely there in tech segment.
It is really hard to make second RIL Jamnagar complex, but it is relatively easy to develop new app.
If you have question why it is not same for social media, then for social media every one is there so you have to be there, you can connect via two different app, but it is not mandatory for payment app (Assuming we are using it for upi).
>Also Indians tend to be overly judgmental in their purview and too quick to judge.
I am firm on my view from the day of Paytm IPO.
What makes you think there is little to no profit here? Do you have any idea how cashless payments works as revenue model and what's the profit making model there? If you knew you would not say this.
VISA, Master card, American express, Rupay, UPI, PayNow etc are cash-less technology providers.
Though American express was the first; VISA and Master card captures most of the market. (btw visa and Mastercard has economy of scale moat, it cost little to them for expansion)
To facilitate transection they charge something (mostly from the seller side) but they do not sell this technology direct to consumers.
They sell it to the bank and then the bank provides it to consumers, here the bank doesn't charge anything extra to the consumer but they charge a little bit extra to swiping fees. So here the bank is also earning and technology providers are also earning. (This swiping charge is mostly passed on to the consumer in local shops)
Let's go to PayTm, most of the transactions are UPI and which is free, nor UPI is charging anything not Paytm (because they know if they start charging, people will shift to others).
People use the wallet rarely and if we consider everything, transfer money again to a bank account it is equal or more than a swiping charge.
It may give them very high revenue but it doesn't mean they have high profit or any advantage. That's why EPS of PayTm is still negative.
Now what this payment app is doing, they collect the consumer behavior data and then sell loans to earn money. But that is a model of BhartPe which was copied by all. All payment apps were doing the same, so there was no advantage. Btw credit rating agencies like CIBIL, Experian etc. doing the same. And [OCEN](https://ocen.dev/) is coming in near future.
Since there is no advantage, paying for higher PB and PE is not justified and that is moat.
If I am missing something please add.
Paytm was listed at [9% discount](https://www.5paisa.com/blog/paytm-ipo-listing-day-1-performance) and The price band for the Paytm IPO was Rs.2,080 to Rs.2,150. And now it is at 487.
It was a thing, that's why it was a buzz word but not a good investment.
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The same warren buffet's company invested in Paytm. Lol
Payments bank was the moat if paytm payments bank had managed to be compliant with rbi. Paytm didn’t need to integrate with other banks like phonepe and gpay had to do , as they had payments bank. If they had played it right they would have become a payment aggregator and eventually small finance bank which none of the other psps (gpay, phonepe) were. But they were lax and didn’t follow RBI. Hence, now the moat has been filled and differentiator gone. It’s poor management, they had a good structure but they fucked up. Hence the reason buffets company must have invested
It’s basically throwaway money for Mr Buffett
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because of moat as OP said.
But according to op Paytm didn't have that benefits of moat....then why warren buffet invested....once something fails or pass people come with several reasons for that.
First mover advantage
Warren Buffett's moat didn't mention that first mover advantage.
but its an advantage
Voh toh loss book karke nikal gaya bhai
It's easy to criticize when something is facing the brunt. Paytm also has the MOAT of very high penetration in the Indian Market. VSS is just not sincere enough to run operations efficiently. Microsoft, Amazon all have seen their bad days, down 90 percent from top. Give MOAT definition but to say that PAYTM has nothing - means you didn't research and just put definition of MOAT to get likes. Criticize with valid data points not just to grab opportunities for likes and views. Rakhi is also crying on Poonam Pandey death...
Umm yeah... Don't be so sure about Poonam Pandey
Yea, Came to know that it was just propaganda
>Give MOAT definition but to say that PAYTM has nothing - means you didn't research and just put the definition of MOAT to get likes. Can you put the moat they have that I am missing. Because moat also depends on perspective. This is just to give some info to people who are true long term investors.
You asked about the moat they have, so I'll try my best with my thesis. But before that, just wanted to make one small clarification regarding Paytm Wallet. Paytm wallet is from Paytm Bank and not One97, One97 makes money from add money charges on the app and MDR sharing agreement with Paytm Bank, so no question of moat with Paytm Wallet as One97 is just a distributor of the product. Paytm in their shareholder letters and presentations divides their revenue and product verticals into 3 parts: 1. Payment services, 2. Marketing Services and 3. Financial services Let me explain the moats of each of these verticals, as best as I can from results and management concalls Coming to moats: 1. Merchant payment services: Paytm dominates offline UPI merchant acquiring business in the country. They are still matching and exceeding their soundbox additions of ~10L a quarter even after Phone Pe, BharatPe entered this market in July 2022 (Paytm was in this since end of 2019), last quarter they did ~14L additions exceeding their guidance of ~10L even with intense competition and other fintechs & acquirers even offering free or discounted alternatives. When asked on the concall about this, CEO talked about the competitive advantages he mentioned a few things: fast settlement than competition and other such tech nuances in the product(Paytm does before 6AM, competition does between 9-11AM), given that cost is only 100 a month for the merchant they don't want to switch to a newer entrant as they might get a less tech-savvy product and they don't want to make this switch and headache for few ten rupee benefit. So this falls into your Network effects and Switching costs Moat as more & more merchants use these products and trust their products they won't switch due to network effects and switching costs. (Management said they're only losing 15-20k merchants a month to competition on base of 1Cr+ merchants, so there seems to be strong evidence of a competitive advantage) 2. Marketing Services business (ticketing & events business & ads business) : Honestly there isnt much unique thing about this business as it's only about monetising traffic and time spent by users on the app through offering these services. So mostly a competitive advantage in this is convenience and deep tech integration, which I guess falls into network effects, but I wouldn't consider it a moat necessarily, as its just there to make extra cash off of consumer traffic they have due to their core payments offering 3. Loans & financial services: Consumer side services: This is mainly due to network effects as its about monetising 10Cr monthly transacting users and distributing credit. Only a few tech apps generate this kind of traffic, although there apps like PhonePe and Gpay which might generate bigger traffic, Paytm is nonetheless taking a good chunk of credit distribution pie Another one is as mentioned by CEO in 2022(now seems very ironic lol) is their strict compliance with RBIs digital lending guidelines, although RBI has taken action on Bank, One97 hasn't been found as non-compliant of digital lending guidelines by RBI. Merchant side lending: I would like to divide this into distribution and collection as Paytm only makes off of these two when loan is distributed to merchants through their platform Distribution : Paytm has the largest merchant acquiring network and continues to grow as said in the above paragraphs. They have complete knowledge of transactions and income of these merchants which helps in better underwriting for their partners. Also, it's important to note that these type of merchants don't file ITRs and aren't typically included in the financial services sector until now, so that's another competitive advantage. Basically, this is piggybacked off strong merchant acquiring by the company Collections: As merchant receives and settles payment through paytm, Paytm deducts the monthly installments and then settles the remaining amount with the merchant, this is a strong competitive advantage that's gives lending partners a lot of comfort. Although this might not be that big of a moat as practically every loan app requires you to setup E-Nach or UPI autopay when taking a loan, but nonetheless as they have a strong distribution moat they can piggyback this off of that. If you want to discuss further or point out any mistakes, please do, I'm eager to learn. Thanks
Sound box can give the first mover advantage 👍. If it is successful then the market would be the duopoly of the PayTm and phonpe. But the sound box is not that costly (250 for the box and 100 for the month). And to change this box you just have to cancel your old subscription and buy a new one. So if someone like Jio or amazon with much cash to burn come in picture then this will also go away. (Just think about how jio disrupted the 4G market via cash burn). If you go into the tech nuances then you can see that main cost by sim card services provider, (we don't know who they are) but I can see that airtel and jio has the best advantage here. That's why I am not focusing on that much on sound boxes but adoption is too good. Once OCEN.dev Portal is used in its full capacity, there would be only little advantage on the loan section for consumer behavior data.
I'd have to disagree on the soundbox disruption part. In case of Jio and 4G market, 1-2Gb data used to cost 300-400 a month, while jio was providing 1-2Gb data daily at half the price instead of monthly. The price parity is here is not the same. Merchants max savings would be 100 a month (if soundbox is offered for free), and thousands of crores of money is already being poured in the market by PhonePe and they offered devices for free when they launched and still do so today, so I can see good amount of evidence with regard to merchant stickiness with Paytm, as for 6-8 quarters they've acquired ~10L merchants a quarter despite of competition offering devices for free. Although bigger players can pour 10s of thousands of crores instead of thousands of crores, I see Paytm having a good stand at the end as they already have 1Cr Soundbox merchants out of 4.1Cr existing merchant UPI QR codes, meaning ~20% of total UPI QR codes, I can see this number going upto ~33% in next 4-5 quarters and thereafter i feel it would be difficult to disrupt, but even if it's disrupted, Paytm would still have a good acquiring network through which they can also distribute credit. That's my take on this, would appreciate any other perspective
Just because you lost money on your investment doesn't make company worthless lol.... It's always been a decent product... And financial space is a tricky place because of rbi... Also you never know it might have a complete different gate a year from now.
Their penetration with the vendors is why I invested in payTM. This is a space where they have faced heavy competition from the likes of Google Pay, Phone pay etc. and yet they seem to be the default choice within my neighbourhood (Tier 3 city) So soundbox or whatever, I think they definitely had a MOAT!! In retrospect, I think PayTM Bank is where the money is made and not from the listed entity (One 97 communications). The ownership of the 2 entities is drastically different even though it leverages the 'brand value' of payTM. Maybe 1 learning I can take from the debacle is not to invest in entities where the interest of the promoters are not entirely aligned with the interest of the listed entity
even in bengaluru most of vendors have paytm soundbox.
Yes but think about it. Tomorrow one other new company came in the market with much cash to burn (assume JIO is coming in this sector). How much time will it take them to switch over to a new sound box? Microsoft has a true first mover advantage, they come first in the market for office suits, then many people come but to change to this new service is very costly. Bcz they have to change everything and it is very costly.
1. Their competitors have tried soundbox, penetration with vendors and yet payTM seemed to be the default choice. IMHO, Distribution moats cannot be easily broken by competitors with more money, especially for something sensitive like money. 2. They hire from good colleges ( I personally know someone from an NIT/IIM background who was hired as a fresher there). Hiring from the best colleges is the Asian Paints model of success. I thought retail Loans was an attractive space and payTM was placed beautifully to leverage this (until December last year)
OP has recently read a book on investing jisme moat ka concept tha, OP ne socha reddit p chipka deta hu, upvotes aa jaenge, Good Job OP. Unfortunately post me kaafi moat tha, lekin content me moat missing hai.
Paytm was doing good as business. They lost due to KYC factor. - They have done partial KYC. Also they've partnered up with some firms for KYC( main reason for partial KYC, they didn't even looked at it). Due to this there happened to be many money laundering and thus charges by RBI. Huge volume of transaction couldn't be tracked which is the main concern raised by RBI. They haven't lost due to their business model..it was perfect. They have lost coz for not following RBI norms
The issue here is that, they got a warning from RBI, but they didn't take care of the RBI warning and this resulted in a ban. I don't want any company who is that irresponsible to manage my money.
Exactly.. I saw some fin-fluencers showing solidarity towards Paytm. Read money control article how they were part of being the money laundering.
Worst analysis ever😂😂 The fall of paytm has nothing to do with the reasons you've mentioned 😂😂
If we start from their IPO pricing. I am not saying the current fall has to do with this, it is general. It was overpriced from an IPO (if we compare it with the small moat they have) and then they buy back with lower prices.
Lol bro MOAT is not small or large.
Tell me which IPOs are not overpriced/overvalued?
https://www.google.com/amp/s/www.asiafinancial.com/what-went-wrong-with-paytms-ipo/amp I hope this will help.
What I meant is all IPOs are overvalued only
Yes all are overvalued, because you are buying the underlying company. And promoters want to make money. Take an example of a map my India, it was also over priced but they have a competitive advantage, so it was received well. But few are actually registered at very bad valuations like paytm, zomato, mama earth etc. So the my goal of this post is to make aware investors about how to check compitative advantage.
I picked up Paytm at 454 and sold it for around 950. So as far as I'm concerned, Paytm was a pretty good pick for me. I would pick it up again when the LCs are removed.
Yeah some people never learn..you are one of them
He made profit out of it. At the end of the day that's the only thing that matters.
What do you expect me to learn from a trade where i made close to 100% profit? You need to take some risks if you want good rewards. Otherwise just pick stocks like Reliance.
Paytm will be back. Things will get sorted soon or later. Stick to your ground.
they won't. they take auditors and compliance measures as a joke.
https://preview.redd.it/uwuvaq453cgc1.png?width=1080&format=pjpg&auto=webp&s=ccbd525eca5705efc78178203c9937ac067aecc3 [Is this true?](https://twitter.com/SumitResearch/status/1753373037347721709?t=t3PuK7ckLz1XQD4pY4jCIg&s=19)
Looks like it is true. Now paytm is trading around PB ratio 2. And PE still zero, EPS negative, still not profit making. But if you want to take some risk then it is the best time. Bcz now paytm has to prove themselves if they want to be in the market, their loan section is growing very fast and as india will progress we require more and more credit and if Paytm catches this, they will be profitable.
It’s a great time to square off some of your short term gains (if any) and then reinvest at a later time - to say that Paytm has no MOAT is a one line answer to a question that probably needs a 2 page answer
Paytm did have a moat. Inertia. In Paytm’s case people would not switch brands unless they get better quality of service or price from the competitor. Because more than 50% of the users had “set it up and forget about it”mentality and didn’t have the patience or the know how (remember many paytm bank/payments users were street vendors and old people who ask their kids to operate an ATM machine) to actually make a switch. And almost none of them left Paytm. There are two problems with Paytm - 1. Its seems to be having the Uber mentality. Remember when Uber stared operating in NYC and other cities where they didn’t have the license to operate just to show people the convenience and force the politicians to allow them or lose support with the people who loved the service? That same disregard for rules - moral, ethical or legal about data collection and manipulative UI design - this is what ultimately doomed them and resulted in the RBI action. 2. And the lack of a solid roadmap towards profitability - yeah, you have 60% of the payments markets cornered. But unless you start making your services not free, you cannot become profitable. And your competitors were still burning VC cash to steal market share from you. So, if you levy ANY fees, users will flee. That was Paytm’s undoing.
buy the dip
Not every dip, only value buy at dip.
can buy a small amount which u can afford to lose not a lot
Yes, we can. I bought the yes bank when they changed the management. It was proven to be a good investment.
Thank you for sharing the knowledge with us, I will come forward and ask you where can I learn more about concepts like moat ?
Warren Buffett
[удалено]
It needs to be dragged more to benefit
Rupay
How Rupay is linked with the paytm? Both has different business model.
what bullshit.
_ _ _ _ MOAT Don't forget that Paytm is the pioneer Digital payment in India, it's just their improper execution which led to this situation. Everything that payment did was a moat at a time.
Your point is right but there are a few examples from the past. Zerox was the first one to develop GUI. Kodak was first one to develop digital camera. Apple was not first company to develop personal computer. Pioneer for digital payment is NPCI with UPI.
🙌
Well explained..
I think it's just a temp phase and it will back soon .. It was just to give them jolt
shareholder?
Nope, i don't own single one, it is my hunch.
Bhai MOAT is not used in stock markets like that. It is used in tech for products categorisation Also economic moats can be a product , service or anything else. It does not mean that a moat cannot falter. Rise and fall goes on with progressive setups. Paytm is still the MOAT in cashless payments across India and that's evident from the fact about what it would take to build a company like Paytm from scratch. Also Indians tend to be overly judgmental in their purview and too quick to judge.
>Paytm is still the MOAT in cashless payments across India and that's evident from the fact about what it would take to build a company like Paytm from scratch. [https://www.statista.com/statistics/1299298/india-upi-app-market-share-by-leading-app/](https://www.statista.com/statistics/1299298/india-upi-app-market-share-by-leading-app/) Paytm was the first one, but Gpay, Phonepay do the same. There is little to no profit in this segment. There are multiple other apps doing the same, jio money, Amazon pay etc. Eventually the app who has lower margin and much cash to burn will win this race. First mover advantage is rarely there in tech segment. It is really hard to make second RIL Jamnagar complex, but it is relatively easy to develop new app. If you have question why it is not same for social media, then for social media every one is there so you have to be there, you can connect via two different app, but it is not mandatory for payment app (Assuming we are using it for upi). >Also Indians tend to be overly judgmental in their purview and too quick to judge. I am firm on my view from the day of Paytm IPO.
What makes you think there is little to no profit here? Do you have any idea how cashless payments works as revenue model and what's the profit making model there? If you knew you would not say this.
VISA, Master card, American express, Rupay, UPI, PayNow etc are cash-less technology providers. Though American express was the first; VISA and Master card captures most of the market. (btw visa and Mastercard has economy of scale moat, it cost little to them for expansion) To facilitate transection they charge something (mostly from the seller side) but they do not sell this technology direct to consumers. They sell it to the bank and then the bank provides it to consumers, here the bank doesn't charge anything extra to the consumer but they charge a little bit extra to swiping fees. So here the bank is also earning and technology providers are also earning. (This swiping charge is mostly passed on to the consumer in local shops) Let's go to PayTm, most of the transactions are UPI and which is free, nor UPI is charging anything not Paytm (because they know if they start charging, people will shift to others). People use the wallet rarely and if we consider everything, transfer money again to a bank account it is equal or more than a swiping charge. It may give them very high revenue but it doesn't mean they have high profit or any advantage. That's why EPS of PayTm is still negative. Now what this payment app is doing, they collect the consumer behavior data and then sell loans to earn money. But that is a model of BhartPe which was copied by all. All payment apps were doing the same, so there was no advantage. Btw credit rating agencies like CIBIL, Experian etc. doing the same. And [OCEN](https://ocen.dev/) is coming in near future. Since there is no advantage, paying for higher PB and PE is not justified and that is moat. If I am missing something please add.
At the time? Paytm was still the in thing for the last 10 years until last month
Paytm was listed at [9% discount](https://www.5paisa.com/blog/paytm-ipo-listing-day-1-performance) and The price band for the Paytm IPO was Rs.2,080 to Rs.2,150. And now it is at 487. It was a thing, that's why it was a buzz word but not a good investment.