One 97 Communications Limited is India's leading digital ecosystem for consumers and merchants as they have built the largest payments platform in India based on the number of consumers, number of merchants, number of transactions and revenue as of March 31, 2021. They offered payment services, commerce and cloud services, and financial services to 337 million registered consumers and over 21.8 million registered merchants, as of June 30, 2021. Their two-sided (consumer and merchant) ecosystem enables commerce, and provides access to financial services through their financial institution partners, by leveraging technology to improve the lives of the consumers and help the merchants grow their businesses. In FY 2019, FY 2020 and FY 2021, and in the three months ended June 30, 2020 and 2021, revenue from the payment and financial services accounted for Rs 16,955 million, Rs 19,068 million, Rs 21,092 million, Rs 4,298 million and Rs 6,894 million, respectively, i.e., 52.5%, 58.1%, 75.3%, 78.0% and 77.4%, respectively, of the revenue from operations. Company launched Paytm in 2009, as a 'mobile-first' digital payments platform to enable cashless payments for Indians, giving them the power to make payments from their mobile phones. Starting with bill payments and mobile top-ups as the first use cases, and Paytm Wallet as the first Paytm Payment Instrument. Paytm is available across the country with 'Paytm karo' (i.e. 'use Paytm') tag line. The Paytm app is a payments-led super-app, through which company offers the consumers innovative and intuitive digital products and services. They offer the consumers a wide selection of payment options on the Paytm app, which include (i) Paytm Payment Instruments, which allow them to use digital wallets, sub-wallets, bank accounts, buy-now-pay-later and wealth management accounts and (ii) major third-party instruments, such as debit and credit cards and net banking. On the app, they enable the consumers to transact at in-store merchants, pay their bills, make mobile top-ups, transfer money digitally, create and manage their Paytm Payment Instruments, check linked account balances, service city challans and municipal payments, buy travel and entertainment tickets, play games online, access digital banking services, borrow money, buy insurance, make investments and more. Company helps the merchants grow their business by giving them solutions that allow them to accept payments, acquire and retain consumers, improve their business operations and access financial services. Merchants can use in-store and online payment solutions to accept payments through Paytm Payment Instruments as well as major third-party payment methods. To help them acquire and retain customers, and create demand, they offer them services like selling tickets to customers, advertising, mini-app listings, channel and loyalty solutions. In addition to helping the merchant ecosystem facilitate more commerce, they also provide software and cloud services that allow large, medium and small merchants to improve their business operations and access important financial tools such as banking, wealth and credit facilities. As per financial performance, One 97 Communication Limited has posted total income/net profits of Rs. 3,579.7 Cr / Rs. (4,230.9) Cr (FY19), Rs. 3,540.7 Cr / Rs. (2,942.4) Cr (FY20), Rs.3,186.8 Cr / Rs. (1,701.0) Cr (FY21), Rs. 948 Cr / Rs. (381.9) Cr (Q1 FY22). So company has posted almost static top-line and consistent losses over last couple of years. They have posted an average EPS of Rs. (43) and average RoNW of (36.9)% for last three fiscals. Issue is priced at a P/BV of 20.67 as per NAV of 104 on 30.06.21. As company is making losses, so there is no point in calculating P/E and thus there is no way to find if company reasonably priced or over valued. As per RHP, there are no listed peers in market. On BRLM's front, is associated with this IPO, and have handled around 76 IPO in last three fiscals. From last Ten IPOs, two is opened below issue price and remaining are opened above issue on the day of listing. As of now, Four are trading below issue price and other are trading above issue price. ( As on 28.10.21) As per financials, One 97 Communication Limited has shown almost static results with consistent losses. Company provides platform for digital eco-system and one of the biggest name in this sector. Also, GoI is very much interest to increase digital economy and this will be very beneficial for this sector. We expect this sector to grow at good rate and this company will able to remain market leader, but its very competitive sector and banks are trying to enter in this sector. So, we give NEUTRAL rating for this IPO and high risk taking investors may apply.
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