Paytm protest vote turns heat on fintech darling

CHENNAI, Aug 22 (Reuters Breakingviews) - Indian fintech posterchild One97 Communications (PAYT.NS), widely known as Paytm, has taken another drubbing from investors. Some 75% of its public institutional owners voted against the pay packages of founder, chairman and Chief Executive Vijay Shekhar Sharma and as well as finance chief Madhur Deora.

There’s no immediate consequence for the $6 billion company because the overall vote went its way: 60% of the company’s stock is held by friendly investors including entities related to China’s Alibaba (9988.HK), SoftBank (9984.T) and Sharma himself, and virtually all of them toed the company line. The mini-revolt followed unusually bold recommendations by several Indian shareholder advisory groups led by IiAS, which found Sharma’s overall renumeration was higher than all other bosses of companies in the S&P BSE Sensex index, most of which are profitable.

But the count means Paytm is under pressure on multiple fronts. It’s losing even more money since its spectacularly poor debut in November. Its shares are now some 64% below the offer price. Walmart’s (WMT.N) unlisted PhonePe is providing stiff competition, and the Reserve Bank of India keeps tightening rules making it harder for payment companies to turn a profit. Sharma will really feel the heat as and when his friendly backers start to cash out. (By Una Galani)

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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