InvestorQ : How should investors evaluate the Paytm IPO since it is loss making company?
manisha Kolvenkar made post

How should investors evaluate the Paytm IPO since it is loss making company?

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Crowny Pinto answered.
2 months ago
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To begin with, investors must go beyond profit/loss and look at the trend of losses. For Paytm, the net loss has narrowed from Rs.4,217 crore to Rs.2942 crore, which is a positive signal. But that may not be enough since net cash burn is still above Rs.2,800 crore annually.

The payments business accounts for 95% of total revenues with financial services being marginal. Indian investors must get used to loss making digital IPOs first, as old valuation rules like PE, PVB and PECV won’t work. The big advantage is that Paytm is a household name.

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