Paytm Money considering applying for MF licence as an asset manager: CEO

Company clocked over 20 million annual direct mutual funds transactions with assets under management of over Rs 5,000 crore, says Varun Sridhar

Paytm Money is considering applying for a mutual fund (MF) licence as an asset management company (AMC) and is studying regulations, said its chief after gaining users for the company’s broking business in six months.

"We are thinking about it. The regulation has come. We are studying it to understand what is the roadmap that we can take. We have partnered with over 40 AMCs today. So anyway every scheme is available on Paytm Money," Varun Sridhar, chief executive officer of Paytm Money, told Business Standard on Thursday.

The company offers mutual funds, digital gold, equity, IPO, ETF and F&O and other financial products. "In the next 18 months, there will be more products launched on the platform even as we look to simplify stock trading," said Sridhar.

In 30 months, Paytm Money has seen over 20 million annual direct MF transactions with assets under management (AUM) of over Rs 5,000 crore.

Paytm Money has seven million registered users on the back of zero commission and systematic investment plan (SIP) of as low as Rs 100, offering MFs from over 40 asset management companies (AMCs). Apart from this, it has now over 63 million users of its digital gold services and more than 200,000 accounts in less than six months in stocks and exchange traded funds (ETFs).

In the last six months of the launch of its broking business, it has opened 200,000 accounts with an average monthly turnover of over Rs 6000 crore and more than four million average monthly trades. Paytm Money's broking business has seen a trade split of 60 per cent cash, 30 per cent futures & options (F&O) and 10 per cent intraday since launch.

The company's stockbroking service has brought direct equity investors to an underpenetrated segment. "There are currently 15 million user in the market in the country. We want to broaden the base in the country by adding another 15 million. As such, around 50 per cent of customers on our broking platform are first time engaged in trading," said Sridhar. The company, however, ruled out foray into commodities since it was not retail safe and more trader skewed.

Paytm Money grew 40 per cent during the coronavirus pandemic. Moreover, 20 per cent of new users on its platform are organic while rest come from Paytm platform. According to Sridhar, this ratio is set to change in near future to 60:40 for Paytm versus organic user addition.