Latest News | Paytm Valuation at USD 20 Billion, Excluding New Business Potential: Damodaran

New Delhi, Oct 6 (PTI) Digital payments and financial services firm Paytm's valuation is around USD 20 billion if the potential of its new business is excluded, according to US-based valuation expert Aswath Damodaran.

Damodaran, who is a professor specialising in finance at the Stern School of Business at New York University, values the unlisted shares of the IPO-bound firm at Rs 2,950 apiece.

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In a blog dated October 4, Damodaran said on one side, there will be some who view a value of close to USD 20 billion (Rs 1.5 lakh crore) for a company with a pittance in revenues, a history of operating losses and distracted management as insanity.

"On the other side, there will be some who feel that I am not giving the company credit for all of the new businesses it can enter, using its vast platform of users, and thus under valuing the company.

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"To both sides, my defense is that this is my story and valuation, and it will drive my investment," Damodaran said.

Paytm is learnt to be looking at a valuation of Rs 1.47 lakh crore to Rs 1.78 lakh crore as it plans to hit the bourses this month with a Rs 16,600 crore public offer.

"Needless to say, if I invested in Paytm, it would not only have to be at the right price, i.e., trading at less than Rs 1500 billion, but also with the acceptance that this cannot be a passive (buy and hold) investment, but one that will require active engagement and monitoring of the company's actions and performance," Damodaran said.

Paytm declined to comment on a query sent in this regard.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)