One 97 Communications, which operates under Paytm brand, has reappointed its founder Vijay Shekhar Sharma as managing director (MD) and chief executive officer (CEO) till December 18, 2027.
“We wish to inform you that based on the recommendations of the Nomination and Remuneration Committee and subject to the approval of shareholders, the Board of Directors of the Company (“Board”), at their meeting held on May 20, 2022, have considered and approved re-appointment of Vijay Shekhar Sharma as “Managing Director & Chief Executive Officer” of the Company for a tenure of 5 years effective from December 19, 2022, to December 18, 2027,” One97 Communications said in a regulatory filing to the stock exchanges.
The statement further noted, “Vijay Shekhar Sharma is an Indian technology entrepreneur who has played an instrumental role in revolutionizing the digital payments and financial services landscape in India as the Chairman, Managing Director and CEO of One97 Communications and its consumer brand Paytm. Under his guidance, Paytm is on a mission to bring half a billion Indians into the mainstream economy.”
Vijay Shekhar Sharma, from the small central Indian town of Aligarh, founded One97 about two decades ago and won acclaim nationwide as a small-town-boy-made-big. But analysts including those at Macquarie Capital Securities (India) Pvt. have questioned his ability to turn Paytm into a profitable business any time soon.
Paytm disbursed over 15 million loans worth 76.23 billion rupees in the year ended March, the company said in its earnings release. Its merchant base grew to 26.7 million, it said.
India’s consumer internet stocks have taken a beating, mirroring the worldwide tech stock slide, but the stock of the high-profile Paytm continues to hover around about a fourth of its offer price.
The stock swoon has proven painful for early backers of Paytm, as its market cap has dropped. Berkshire Hathaway Inc. invested in One97 when the company was valued at more than $10 billion in 2018, and T. Rowe Price Group Inc.invested at a $16 billion valuation the following year, Bloomberg News has reported.
In a letter to shareholders last month, founder Sharma said the company was targeting operational break-even by September next year. Paytm in April predicted it will become profitable in six quarters on an operating earnings before interest, tax, depreciation and amortization basis. That forecast followed a doubling of its gross merchandise value to 2.59 trillion rupees in the three months ended March.