One97 Communications Ltd., the parent of Paytm, said its board has decided not to proceed with the proposed bonus share issue at this time, opting instead to prioritise long-term growth and profitability.
The decision was taken at the company's board meeting held on July 20, where directors also approved the unaudited standalone and consolidated financial results for the quarter ended June 30, 2026.
The company said the board evaluated the bonus issue proposal from the perspective of long-term shareholder value creation.
"After evaluating the proposal from the perspective of long-term shareholder value and due deliberation, the Board was of the view that the Company should continue to focus on further compounding growth and profitability for shareholder value creation. Accordingly, the Board decided not to proceed with the said proposal at this time," Paytm said in an exchange filing.
The board said its priority remains strengthening the company's growth trajectory and improving profitability rather than undertaking a bonus share issue at this stage.
Paytm Q1 Performance
Paytm reported a better-than-expected performance for the June quarter, driven by strong growth in its financial services and payment services businesses, while the board decided not to proceed with a bonus share issue.
Its revenue rose 28% year-on-year (YoY) to Rs 2,448 crore from Rs 1,918 crore, while net profit increased 79% to Rs 220 crore from Rs 123 crore. On a sequential basis, revenue grew 8% and profit climbed 20%.
The company reported its highest-ever quarterly earnings before interest, tax, depreciation and amortisation (EBITDA) of Rs 203 crore, up 182% from a year ago and 54% from the previous quarter. EBITDA margin improved to 8% from 4% a year earlier and 6% in the March quarter.
Merchant gross merchandise value growth accelerated during the quarter, with revenue expansion led by financial services and payment services. However, the contribution margin slipped marginally to 54.7% from 55% in the previous quarter, while the marketing services business declined on a year-on-year basis and remained largely flat sequentially.
Paytm said its online merchant business continues to gain traction, while payment processing margins are structurally improving and are expected to strengthen further. The company also highlighted robust growth in its personal loan business, supported by the addition of lending partners and higher loan disbursements. Merchant loan distribution continued to scale, aided by a strong mix of repeat borrowers.
Consumer payments grew at more than twice the industry growth rate during the quarter, while the company said artificial intelligence is helping improve productivity and lower platform development costs. It also expects increasing market share in card processing to support revenue growth going forward.
Separately, the board approved an investment of up to Rs 100 crore in wholly owned subsidiary Paytm Money through a rights issue. The capital infusion will be used to fund technology upgrades and expand the company's investment and wealth management businesses.
The board also approved the reallocation of the remaining Rs 1,686 crore of unutilised IPO proceeds. The funds will now be deployed towards acquisitions, new business initiatives and broader ecosystem growth. The company has also proposed extending the utilisation timeline for these proceeds until March 31, 2029.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.