Is there something really worrisome about Paytm or you expect this sell-off to end soon?

Investors normally tend to wonder how can a stock which almost redefined wallet payments in India go so wrong in the stock markets. The fact is that One97 Communications, the holder of the Paytm brand, continues to show impressive top line numbers. Its GMV or gross merchandise value has been growing quarter after quarter on a consistent basis. Paytm’s retail customer franchise at 33 crore and more than 2 crore merchants is a big positive.

Despite this infallible combination, Paytm is not alone in this type of mismatch. Even US companies like Twitter, Facebook and Amazon learnt the hard way that it takes a long time to monetize a huge data bank of customers. Also, when the process of monetization actually starts, the result will be an exponential growth in profits and revenue per customer. However, the real issue with Paytm is something much bigger and more about control.

Vijay Shekhar Sharma, with 8.9% holding, calls the shots while Ant Financial, Alibaba, SAIF Partners and Softbank jointly own 65% in Paytm. For these investors, the damage to stock price is an opportunity to nominate their own person. As promoter stake dwindles, their ability to stay at the helm is questioned. Like in Flipkart, the mess may end with Vijay Shekhar Sharma stepping down and making way for a nominee of the PE funds.