Vijay Shekhar Sharma dials former executives to rebuild Paytm

“Talks with Vasireddy and Malhotra, who could be leading the user growth initiative at Paytm, were initiated sometime back. Vijay has been in touch with his close aides and wants to rebuild the whole team as he takes direct charge of each business,” two senior leaders tell Moneycontrol.

While Malhotra, who is currently working on his startup GenWise, denied the move, Satti and Vasireddy couldn’t be reached for comment.

Meanwhile, Paytm responded saying this is speculative, highlighting their focus on promoting high-performing talent into leadership roles.

They noted that their core payment and credit businesses are led by experienced Chief Operating Officers (COOs) and Chief Business Officers (CBOs), who work directly with Paytm's CEO and senior management to enhance the next line of leadership.

“We have not reached out to nor are we in discussions with former executives. We have been focusing on strengthening the roles of our next line of leaders internally and ensuring strong succession planning,” a Paytm spokesperson told Moneycontrol.

Paytm has been under pressure since the RBI's crippling restrictions on Paytm's associate company, Paytm Payments Bank Limited (PPBL), which was powering most of the mobile payment firm's products and services.

The fintech major has lost its UPI market share, high margin wallet business, and also a loss of confidence among its lending platform partners, a key source of growth and profitability. The company's share price has hit a nadir and several brokerages constantly downgrading the stock over the past three months.

Sharma has been taking control of the various verticals to revive growth, reduce customer attrition and shore up confidence among partners, merchants and customers.

In his attempt to restore the old glory, the leader is also trying to bring back the senior executives who led the initial growth of the company and its monetisation journey.

"Sharma's strategic move to reunite with his former allies comes at a pivotal juncture, especially with murmurs of internal discord within Paytm," further commented a senior executive, speaking on condition of anonymity.

The exit of company’s President and COO, Bhavesh Gupta, one of Sharma’s closest confidants, has been among the turning points at Paytm, and how the organisation was structured, as major CBOs and COOs roles fell under the purview of Gupta's supervision.

Moneycontrol had previously reported on alleged differences of opinion between the two leaders over business practices, especially on the lending partnership side.

"There has been a noticeable divide between 'Team Vijay' and 'Team Bhavesh,' signifying Vijay’s intentional detachment from any affiliation with the latter. He wants to take the charge back and getting back his former trusted allies is the most expected move. He needs his trusted resources now more than ever,’ the executive cited above added.

Old and new ties 

Having spent the bulk of their careers at Paytm, Satti and Vasireddy are well-acquainted with the company from its inception.

Satti, who joined Paytm back in 2006, rapidly climbed the ranks in the span of her 15-year long career at Paytm from a Human Resources manager to VP of Business and eventually CEO of Paytm Payments Bank.

Meanwhile, Vasireddy, who came on board in 2009, rose from AVP of Sales to COO of the Payments business by 2017, driving the digital firm’s expansion into offline payments and QR code solutions.

Both the senior executives left for new ventures—Satti to Arthmate and Vasireddy to Kalaari Capital—but their potential return could be a strategic move by Sharma as he rebuilds his core teams post the Paytm Payments Bank (PPBL) debacle and attrition of senior leaders.

Meanwhile, Paytm is on the lookout for a banking industry veteran to lead one its most critical and high-growth vertical-Lending.

This move makes sense as fintech firms face stringent compliance requirements under the RBI's watchful eye.

Sources indicate that Sharma has met with IndusInd Bank's Sai Giridhar to discuss a potential partnership. Giridhar is currently the Head of Retail Assets and Credit Cards at IndusInd Bank.

The outcome of the discussion remains uncertain, they added.

“The team has been on a lookout for a senior experienced banker. It’s still nascent but something may come out soon,” two independent sources, internal and external, told Moneycontrol.

Oversight

A restructuring has been at play at Paytm since the last few months as major leaders, including Sharma’s close confidant and Gupta, take an exit post the RBI’s diktat on its banking unit to wind down major operations.

Ajay Vikram Singh (CBO user growth and UPI), Bipin Kaul (CBO offline payments), Sandeepan Kashyap (CBO Consumer Payments), Praveen Singh (COO Commerce), Sumit Mathur (CMO), Surinder Chawla (MD and CEO, PPBL) have left their respective positions in the last three to four months.

Source: Moneycontrol research

In a previous set up, Gupta wielded considerable influence and had oversight over all major business verticals, with all major heads reporting to him.

With Gupta gone, Sharma has now taken on these duties personally, abandoning his usual hands-off management style.

Per sources, all the major divisions are currently being led by the “second in command” of the previous verticals heads, all directly reporting to Sharma.

This includes Ripunjai Gaur, CBO (Offline payments); Tejinder Singh, CBO (Enterprise merchants, SMB merchants, EMI); Narendra Yadav, CBO (Wallet & UPI); and Avijit Jain, SVP & COO (Lending).

In a recent move, Gaur was designated as being part of senior management personnel w.e.f May 22.

While denying that they are hiring new talent or bringing back former executives in leadership positions in the next few months, Paytm claims to be working on internal promotions.

“We have been focusing on strengthening the roles of our next line of leaders internally and ensuring strong succession planning. Paytm’s core business lines are helmed by a seasoned leadership team that has dedicated considerable time to building these businesses,” a Paytm spokesperson told Moneycontrol.

Further he added, “Additionally, as outlined in our earnings release, we are actively working to reward our high-performing talent by promoting them into leadership roles.”

During the fourth quarter of  FY24, the fintech firm managed to avoid any significant decline in its revenue, even with the termination of PPBL services.

Paytm’s revenue from operations was down by mere 2.9 percent Y-o-Y at Rs 2,267 crore, against Rs 2,334 crore in the same period last year.
It was down by 20 percent compared to the previous quarter.

The net loss, however, ballooned 3.2X to Rs 550 crore in the said quarter. In order to offset some of the impact, Paytm managed to curtail its marketing expenses activities in the quarter, bringing it down by 16 percent Q-o-Q at Rs 2,691 crore while keeping it stable Y-o-Y.

Paytm managed to close its FY24 with 25 percent growth in revenue at Rs 9,978 crore while the losses narrowed to Rs 1,442 crore, a drop of 19 percent compared to FY23.

Moving forward, Paytm is banking on the payments and lending business to bounce back from the lost ground. It remains unclear as to how the firm will do that for the former as a major part of the payments business flows through limited revenue channel—UPI.

On the lending business front, it has adopted a distribution-only credit disbursement model and plans to enter a secured lending front, while reducing its employee cost significantly. Doubling down on insurance and wealth management is also on the horizon in FY25.