Paytm protest vote turns heat on fintech darling

Paytm founder and CEO Vijay Shekhar Sharma breaks down while giving a speech during the company’s IPO ceremony at the Bombay Stock Exchange (BSE) in Mumbai, India, November 18, 2021. REUTERS/Niharika Kulkarni

CHENNAI, Aug 22 (Reuters Breakingviews) – Indian fintech poster child One97 Communications ( PAYT.NS ), known as Paytm, has taken another flak from investors. About 75% of the public institutional owners voted against the pay packages of founder, chairman and managing director Vijay Shekhar Sharma as well as chief financial officer Madhur Deora.

There is no immediate fallout for the $6 billion company because the overall vote went his way: 60% of the company’s shares are owned by friendly investors, including entities linked to China’s Alibaba ( 9988.HK ), SoftBank ( 9984.T ) and Sharma himself , and virtually all of them took the company line. The mini-rebellion followed unusually bold recommendations from several Indian shareholder advisory groups led by IiAS, which found that Sharma’s total remuneration was higher than that of all other heads of companies in the S&P BSE Sensex index, most of which are profitable.

But the count means that Paytm is under pressure on several fronts. It has lost even more money since its spectacularly poor debut in November. The shares are now around 64% below the offer price. Walmart’s ( WMT.N ) unlisted PhonePe faces stiff competition as the Reserve Bank of India continues to tighten rules that make it harder for payments companies to make money. Sharma will really feel the heat as and when his friendly backers start making money. (by Una Galani)

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