Vijay Shekhar Sharma, founder of Paytm, has set an ambitious target of generating one billion dollars in free cash flow for the company. According to reports from The Economic Times, Sharma made this commitment at the 22nd Motilal Oswal Annual Global Investor Conference in Mumbai, stating he expects to achieve this milestone regardless of whether it takes 3 or 4 years. He described this billion dollars in free cash generation as the personal benchmark that would complete "phase one" of his life, with free cash defined as money left after net profit and capital expenditure.
The target comes with a stricter allocation discipline, as reported by The Economic Times. Sharma emphasized that the company should exit businesses that consume energy and resources without producing a return, and concentrate creativity where it can see a bottom line in a large market. "Wherever you can see a bottom line, focus there," he stated. He also framed merchant payments as a business that can grow without relying on merchant discount rate revenue, incentives or grants, with Paytm having realigned its business around "zero MDR, zero incentives and zero grants."
Sharma outlined significant growth potential in India's lending market, as reported by The Economic Times. The lending market is growing at about 15% and could potentially reach ₹400 lakh crore in 5 years. He expects the market to double in four to five years as the economy, demand for credit and lendability increase. "My belief is that when the market doubles, fintechs' market share will more than double," he stated, adding that technology companies' first principles approach allows them to create markets that traditional financial institutions may not serve.
Sharma acknowledged that technology companies initially entered financial services without fully appreciating regulatory obligations, as reported by The Economic Times. "Fintech is no longer merely a technology company," he said, comparing the sector's evolution to moving from adolescence to adulthood. Paytm now discusses proposed products with regulators before introducing them, reversing the earlier practice of launching first. "Now we work in sync with the regulator," Sharma explained, stating they first go to the regulator, explain what they plan to do, and then launch it in the market.
According to The Economic Times, Paytm's revived Postpaid business represents another potential growth lever, though Sharma said it would be scaled cautiously. The company had paused the product in December 2024 after previously disbursing ₹3,000 crore a month. Current disbursements are in the hundreds of crores, with the company now working with banks after previously partnering with non-bank lenders. Banks offer a "dramatically lower" cost of capital and support a larger loan book, Sharma noted, describing Postpaid as lending restricted to payments with dynamic limits informed by customer behaviour.
