Wealth management platform Paytm Money will raise an additional ₹500 crore from parent One97 Communications Ltd (OCL) as it looks to achieve break-even in the next 12-18 months, said a top company executive.
The company, which launched futures and options (F&O) trading on its platform on Wednesday, aims to have nearly 100 million users over the next 3-5 years.
Presently, the options trading feature will be provided as early access to limited users, with the platform expecting to open up the offering to a larger audience by the end of January.
With the launch of F&O, Paytm Money, which has close to 6 million users currently, is aiming at an overall daily turnover of ₹1.5 trillion and 1 million trades a day in 18 to 24 months.
“Through the release of newer products, we are expanding our monetization capabilities and will look to break even in the next 12-18 months,” said Varun Sridhar, chief executive officer (CEO), Paytm Money, in an interaction with Mint.
Paytm Money aims to target active traders with its new products as well.
Sridhar said the derivative product is designed keeping the middle-income groups in mind versus high net-worth individuals. For derivatives, the platform will allow users to create multiple watchlists, set price alerts and observe comprehensive performance charts with 180 indicators.
“We would want to give individuals the confidence to make options and future derivative trades, by simplifying the platform. However, in 2021, Paytm Money will also expand its outlook and target high-frequency traders by launching algorithm-based trading products,” he said.
Instead of any contracts and commitments with traders, Paytm Money will charge customers a flat transaction fee of ₹10, irrespective of the trading amount.
With Noida-based Paytm making heavy bets on financial services, OCL founder and CEO Vijay Shekhar Sharma said financial services will be the aggregated reason for Paytm’s profitability.
As monetization opens up for Paytm’s different business lines, Sharma said OCL can see the time to profitability shrinking and it may turn fully profitable in the first half of FY22.
“Paytm Money is important to the (OCL) group from a revenue break-even perspective, as it has amassed a high number of users that are paying for its different products. Paytm Money is definitely a bright spot in our profitability drive. We have taken a regulated approach through licences, for our financial service business, which will be the aggregated reason for our profitability,” Sharma said.
After launching stock trading on its platform in August, Paytm Money now offers users various wealth management solutions such as direct mutual funds, exchange-traded funds, initial public offering (IPO) investments, National Pension System, and digital gold.
The article was first published on livemint.com