Investment themes in a Paytm IPO

The entire model is data-driven with a super app Paytm. This new-age company, though consistently making losses, was last valued at USD $ 16 billion by private equity investors. The IPO listing is expected to give a mind-boggling valuation of USD $ 24 to 30 billion, which is more than 50 times the revenues of the company. Globally, the payments companies like Visa and Mastercard are valued at less than 25 times their revenues. Paytm has a lot to prove in the public market where profitability and predictability of revenue stream matter. The market would be keenly waiting for a break-even road map, profitability guidance, and key valuation drivers, and scaling up of high-margin businesses.