Would you suggest that I should invest in the Paytm IPO and why? I am worried that this is a loss making company for so many years?

Most digital plays are bets on the long term and not on the short term. Digital stories take a long time to become profitable. Here is why I do feel that despite the challenges, the Paytm IPO can be a good bet for investors.

a) Unlike the previous digital IPOs like Zomato, Policybazaar or Nykaa which are elegant portal models, Paytm is a complete ecosystem.

b) Paytm offers a bank, a payment interface via UPI, a digital wallet to store money, a shopping mall, ecommerce platform and financial services

c) Such ecosystems have lateral potential with all the building blocks and a solid customer database to be effectively leveraged in multiple modes.

d) Paytm has a formidable database. It has 33 crore users and over 7.5 crore users transacting on the Paytm platform on a monthly basis.

e) It has empanelled over 2.2 crore merchants on its Paytm platform and 6 crore bank accounts, which is actually a huge monetization basket.

f) Paytm is now dropping freebies and cash backs and has also cut down on advertisement and promotion expenses. Most of them are already front ended.

g) The biggest asset managers in the world are all sold on to the idea of Paytm and this includes anchor investors like Blackrock, Vanguard and Fidelity.

h) There are also some formidable sovereign wealth funds investing in Paytm like GIC of Singapore, Abu Dhabi Investment Authority and Canadian Pension Fund.

i) Even competitors like HDFC Bank are partnering with Paytm to promote its credit cards business considering its huge customer touchpoint potential.

In short, investors need to take a very medium to long term view of Paytm IPO and commit funds to the same.