#1शुभ लाभ Paytm Accepted here LIP Investor Presentation For quarter ending September 2023 Paytm Accepted Here Paytm UPI UPL Pectpais LIPI Paytm Paytm#2Disclaimer Paytm By attending the presentation or by reading the presentation slides you agree to be bound as follows: This Presentation is prepared by One 97 Communications Limited ("Company") and is for information purposes only without regards to specific objectives, financial situations or needs of any -particular person and is not and nothing in it shall be construed as an invitation, offer, solicitation, recommendation or advertisement in respect of the purchase or sale of any securities of the Company or any affiliates in any jurisdiction or as an inducement to enter into investment activity and no part of it shall form the basis of or be relied upon in connection with any contract or commitment or investment decision whatsoever. This Presentation does not take into account, nor does it provide any tax, legal or investment advice or opinion regarding the specific investment objectives or financial situation of any person. Before acting on any information you should consider the appropriateness of the information having regard to these matters, and in particular, you should seek independent financial advice. This Presentation and its contents are confidential and proprietary to the Company and/or its affiliates and no part of it or its subject matter be used, reproduced, copied, distributed, shared, retransmitted, summarised or disseminated, directly or indirectly, to any other person or published in whole or in part for any purpose, in any manner whatsoever. The information contained in this Presentation is a general background information of the Company and there is no representation that all information relating to the context has been taken care of in the Presentation. We do not assume responsibility to publicly amend, modify or revise any information contained in this Presentation on the basis of any subsequent development, information or events, or otherwise. This Presentation includes certain statements that are, or may be deemed to be, "forward- looking statements" and relate to the Company and its financial position, business strategy, events and courses of action. Forward-looking statements and financial projections are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward- looking statements and financial projections. Representative examples of factors that could affect the accuracy of forward looking statements include (without limitation) the condition of and changes in India's political and economic status, government policies, applicable laws, international and domestic events having a bearing on Company's business, and such other factors beyond our control. Forward-looking statements and financial projections include, among other things, statements about: our expectations regarding our transaction volumes, expenses, sales and operations; our future merchant and consumer concentration; our anticipated cash needs, our estimates regarding our capital requirements, our need for additional financing; our ability to anticipate the future needs of our merchants and consumers; our plans for future products and enhancements of existing products; our future growth strategy and growth rate; our future intellectual property; and our anticipated trends and challenges in the markets in which we operate. Forward- looking statements are not guarantees of future performance including those relating to general business plans and strategy, future outlook and growth prospects, and future developments in its businesses and its competitive and regulatory environment. These forward-looking statements represent only the Company's current intentions, beliefs or expectations, and no representation, warranty or undertaking, express or implied, is made or assurance given that such statements, views, projections or forecasts in the Presentation, if any, are correct or that any objectives specified herein will be achieved. We, or any of our affiliates, shareholders, directors, employees, or advisors, as such, make no representations or warranties, express or implied, as to, and do not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein and accept no liability whatsoever for any loss, howsoever, arising from any use or reliance on this Presentation or its contents or otherwise arising in connection therewith. The information contained herein is subject to change without any obligation to notify any person of such revisions or change and past performance is not indicative of future results. This document has not been and will not be reviewed or approved by a regulatory authority in India or by any stock exchange in India. No rights or obligations of any nature are created or shall be deemed to be created by the contents of this Presentation. Use of Operating Metrics The operating metrics reported in this Presentation are calculated using internal Company data based on the activity of our merchants, consumers and other participants in our ecosystem. While these numbers are based on what we believe to be reasonable estimates of engagement, for the applicable period of measurement, there are inherent challenges in measuring usage across our large online, offline, in-store and mobile presence. The methodologies used to measure these metrics require significant judgment and are also susceptible to algorithm or other technical errors. We regularly review our processes for calculating these metrics, and from time to time we may discover inaccuracies in our metrics or may make adjustments to improve their accuracy, which can result in adjustments to previously disclosed metrics. In addition, our metrics will differ from estimates published by third parties due to differences in methodology. We have converted financial amounts from millions into Cr and hence there could be some totaling anomalies in the numbers. 2#3H 888888888888 A A 888 Paytm ❤UPI To bring Half-a-Billion Indians to the Mainstream Economy through Technology-led Financial Services#4Our Core Business is to Acquire Customers for Payments and Cross-sell Loans Payment Business ■ Paytm app has pioneered consumer mobile payments using UPI, Wallet, Postpaid and Cards Paytm enables micro to large Merchants accept payments on their app or in-store, or on Paytm app Merchants leverage reach of Paytm consumer app to enable mobile commerce and sell to our consumers 12:281 Pestm LP Q Q CashBack 1000 Days UPIMONEY TRANSPER or Contact Brava Hy Paytan Bank Pay Pe 1 And 100 RECHARGE & BLAMENTS C Paytm Average Monthly Transacting Users for the quarter Paytm Accepted Here 9.0 Cr 9.2 Cr 9.5 Cr 8.5 Cr 8.0 Cr Paytm UPI எ Restvis DTHR UP!& Recharge Paytm Postpaid P F ScanAny Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Registered Merchants & Devices at end of quarter ₹ Paytm Postpaid 3.8 Cr 3.6 Cr 3.4 Cr 3.1 Cr 3.0 Cr Loan Distribution ◉ ■ Our loan distribution business is built on our payment rails We offer small ticket mobile credit to consumers and merchants, in partnership with our lending partners 11.8mn unique users have taken loan through Paytm platform Personal Loans Loans 92 L 79 L 58 L 68 L 48 L Merchant Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 ■Registered Merchants Devices 4#5Payments business has two margin drivers Payment Processing Wallet, Postpaid, Credit Card, EMI Overall Margin (Blended) Paytm Gross Merchandise Value for the quarter 15 to 18 bps 7 to 9 bps UPI 3 to 4 bps Paytm UPI Paytm Wallet Paytm Postpaid Paytm Credit Card 41% YoY 4.5 L Cr *4.0 L Cr *3.6 L Cr *3.5 L Cr *3.2 L Cr Paytm EMI Net payment processing margin by payment method Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Subscription Revenues " " 92 Lakh Soundbox and card devices deployed, added over 14 Lakh devices in last quarter Merchant pays ₹100 to 500 per month for these premium services On select deployment we also earn incentives from banking partners and Government Potential market of 10 Cr merchants in India: large subset of this will be paying monthly subscription Paytm Accepted Here Net Payments Margin for the quarter 60% YoY 707 Cr *648 Cr Paytm UPI *505 Cr *443 Cr 459 Cr No Cost EMI Paytm 6P Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Note: We have excluded UPI incentives of 182 Cr from Mar-23 net payment margin for like-for-like comparison 5#6Our Mobile Credit business is based on distribution and collection using Paytm network Distribution We help various lenders disburse small ticket personal loans and merchant loans Postpaid builds long term credit relationship through small consumption loan On disbursement of loans, we typically make 2.5% to 3.5% of loan value upfront Collection ■ We also collect loans for various lenders leveraging our cost effective mobile & digital capabilities Paytm Loans disbursed through Paytm for the quarter 122% YoY *16,211 Cr *14,845 Cr *12,554 Cr *9,958 Cr 132 128 *7,313 Cr 119 105 92 Sep-22 Dec-22 Loan value Mar-23 Jun-23 Number of loans (Lakh) Sep-23 Revenue from Financial Services & Others for the quarter 64% YoY *522 Cr *475 Cr *446 Cr *349 Cr *271 Cr ■ On collection we make 0.5% to 1.5% of current disbursement value ■ Most of the collection fees is received by us post portfolio closure (typically, 12-14 months for Personal and Merchant Loans, and 3 months for Postpaid loans) Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 6#7We offer only 3 types of loans that are based on our payment business • Postpaid Loans Penetration at 4.5% of MTU Large Postpaid user base also provides cross-sell opportunities for Personal Loans & Credit Cards • Personal Loans Penetration at 1.1% of MTU • Cross sell opportunities continue with over 35% of loans to existing Postpaid users • • Value of Loans 122% YoY *9,010 Cr 91% YoY *4,062 Cr 3,927 Cr *8,039 Cr *3,447 Cr *6,794 Cr *2,931 Cr *5,202 Cr *4,050 Cr *2,055 Cr Paytm Merchant Loans Penetration at 6.4% of devices merchants Device merchants accounted for more than 85% of disbursals; Repeat rate of ~50% 171% YoY *3,275 Cr *2,744 Cr *2,313 Cr *1,825 Cr *1,208 Cr Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 # of Loans (Lakh) 89 101 115 123 128 1.9 2.4 2.7 3.0 2.4 0.8 1.2 1.4 1.4 1.8 Calculation of penetration: Postpaid: Avg monthly number of loans in a quarter as a % of that quarter's avg MTU; Personal Loans: Number of loans disbursed in last 12 months as a % of avg MTU in Q2 FY 2024; Merchant loans: Number of loans disbursed in last 12 months as % of devices deployed at end of Q2 FY 2024 7#8Paytm Revenue from Commerce & Cloud for the quarter We also monetize Paytm app traffic by providing marketing services to other businesses Commerce Paytm app is a destination for our merchants to get more business We sell travel, movies and event ticketing and deals, gift vouchers to customers ◉ Commerce services GMV was 2,893 Cr in Q2 FY 2024, up 39% YoY In the Commerce business, we earn 5-6% take rate on GMV Cloud We offer advertising, marketing loyalty services to various enterprises and distribute co-branded credit cards ◉ As of September 2023, we have a total of ~870,000 active cards with SBI Card and HDFC Bank ◉ ◉ We earn upfront revenue on card activation and receive a portion of the interchange fee for the lifetime of the card Advertising is a healthy revenue growth driver for the Cloud business. As of date, we have around 300 advertisers on our platform *420 Cr 12% YoY *392 Cr *423 Cr *405 Cr *377 Cr 235 261 225 249 252 185 168 156 163 125 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 ■Commerce ■Cloud Paytm Meha Sinha Paytm Paytm HDFC BANK HDFC BANK OSBI Card RuPay SA SOCIAL 10% 150 Paytm 8#9Revenue of $2,519 Cr in Q2 FY2024; *319 Cr YoY improvement in EBITDA Before ESOP to 153 Cr Revenue grew by 32% YoY Online sales in Q3 vs. Q2 last year Contribution Profit grew by 69% YoY Contribution Margin at 57% Paytm On back of platform leverage, EBITDA before ESOP has increased to 153 Cr 69% YoY *1,426 Cr *1,304 Cr 153 Cr 6% *1,101 Cr *1,048 Cr *84 Cr 56% 57% *52 Cr *31 Cr 2% 4% 2% 32% YoY *2,519 Cr *2,342 Cr *2,152 Cr 423 *2,062 Cr 405 *1,914 Cr 392 420 571 377 522 *843 Cr 51% 475 51% 446 349 44% 1,414 1,524 1,188 1,197 1,285 -9% *319 Cr YoY Improvement Quarter Ending Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Sep-22 Dec-22 Mar-23 ■Payment Services ■Financial Services Contribution Profit Jun-23 Sep-23 Contribution Margin *(166) Cr Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 EBITDA before ESOP - Margin (%) Commerce & Cloud Note: We have excluded UPI incentives of 182 Crore from Mar-23 revenues, contribution profit and EBITDA before ESOP for like-for-like comparison 6#10Key Focus Areas 1. Innovative products to expand mobile payments acceptance network: Indian merchants' unique features and pricing requirements warrants innovative product launches. We are focused on solving this by launching various types of Soundboxes and Card machines and other devices, backed by a large distribution and service network. 2. Expand Credit and Financial Services: Our focus is to expand credit offerings, which will help consumers and merchants find suitable product, in partnership with our lending partners. 3. Farming of online merchants, by offering wider choice of payment instruments and better success rates. 4. Enabling Commerce: We are enabling merchants to offer deals on Paytm app which drives customer engagement, as well as consumer traffic to the merchants. Paytm Accepted Here Paytm UPI Paytm CARD Soundbox 10000 Paytm MUSIC Soundbox Paytm Accepted Here Paytm Accepted Here Paytm UPI UPI & Wallet Paytm Postpaid UPI Paytm POCKET Soundbox Paytm UP 10#11Annexure 11#12Financial performance Paytm Quarter Ended Change (in \ Cr) Payment Services Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 YOY QoQ 1,188 1,197 1,467 1,414 1,524 32% 8% Financial Services 349 446 475 522 571 64% 9% Commerce & Cloud 377 420 392 405 423 12% 4% Revenue from Operations 1,914 2,062 2,334 2,342 2,519 32% 8% Payment processing charges 746 738 780 767 817 10% 7% Other direct expense 325 277 271 271 276 (15%) 2% Contribution Profit 843 1,048 1,283 1,304 1,426 69% 9% Contribution Margin % 44% 51% 55% 56% 57% 1,257bps 92bps Marketing 137 136 127 181 180 31% 0% Employee cost (Excl ESOPs) 573 584 614 730 807 41% 11% Software, cloud and data center 173 171 188 155 155 (10%) 0% Other indirect expenses 127 126 121 155 130 3% (16%) Total indirect expenses 1,010 1,016 1,049 1,220 1,273 24% 4% EBITDA before ESOP expense (166) 31 234 84 153 +319 Cr +69 Cr EBITDA before ESOP cost Margin % -9% 2% 10% 4% 6% 1,484bps 250bps Note: March 2023 financials include 182 Cr UPI incentives reported during the quarter; Hence QoQ financials are not comparable Payments revenue includes Other Operating revenue, as it relates to the Payments business 12#13Reconciliation of Non-GAAP Measures EBITDA before ESOP cost Quarter Ended Paytm (in Cr) Sep-22 (Unaudited) Dec-22 (Unaudited) Mar-23 (Audited) Jun-23 (Unaudited) Sep-23 (Unaudited) EBITDA before ESOP cost (A) (166) 31 234 84 153 ESOP cost (B) (371) (362) (363) (377) (385) Finance costs (D) (5) (5) (7) (7) (7) Depreciation and amortization expense (E) Other income (F) Share of profit/(loss) of associates / joint ventures (G) Exceptional items (H) (104) (124) (160) (159) (180) 100 78 Income Tax expense (1) Loss for the period (J=Sum of A to I) LO 5 0 (15) (15) ེ。 ཅེ 8 (18) 1 0 (6) (4) (13) (571) (392) (168) (359) (292) 123 144 March 2023 financials include 182 Cr UPI incentives reported during the quarter; Hence QoQ financials are not comparable 13#14Cash Balance Breakup of available Cash and investable balance (Net Cash Balances) Paytm Particulars ( Cr) Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Cash and Bank Balances in Current Accounts (Net of Borrowings) 1,399 1,953 2,737 1,678 1,831 Deposits with banks 5,875 5,311 4,328 3,996 4,203 Current Investments (Mutual Funds, Treasury bills and Commercial Papers) 1,908 1,692 1,209 2,693 2,719 Total Balances 9,182 8,957 8,275 8,367 8,754 14#15Expected ESOP charges (as disclosed in December 2022) Paytm Total ESOP Cost (Cr) Q1 Q2 Q3 Q4 As of Sep 2022 In Mn Basic shares outstanding 648.9 FY 2023 376 370 ESOPS vested and unexercised 3.5 FY 2024 363 363 343 340 ESOPs granted and unvested 33.1 FY 2025 331 273 230 178 ESOPs available for distribution 10.6 FY 2026 148 147 72 71 FY 2027 66 99 595 65 5 CT Estimated Fully Diluted shares 695.0 Note: 1. The above table illustrates expected ESOP cost for all ESOPs granted so far, as of November 2022 2. Above cost assuming all granted ESOPs are vested and no new ESOPs are granted 3. For any lapses of unvested ESOPs, normally on attrition, the cost of unvested ESOP recorded so far is reversed in that quarter 45 4. Actual charges might be different based on incremental issuances as well as lapses 5. 6. For new ESOP grants, the total estimated charge would be number of options granted times the fair value per share, which is based on the share price on the day of the grant, among other factors. The charge is front-ended with approximately 38% in Year 1, 28% in Year 2, 18% in Year 3, 11% in Year 4 and 5% in Year 5 Movements of share price after the date of the grant do not affect the ESOP charge for already granted ESOPS 15#16चाय OF RS-235 RECIEVED. YAY!! Ο स् स् "RECIEVED RAKH GIFT 25001 Paytm GOSHBACK 30% Thank Your PODI IDLI don 201 un ast- unsol Π Jag मु गईडी Pay भुगतान Payr 00000 BUS TICKET BOOKINGS on Paytm KUMA TRAVER INDIA♥ Paytm 44 TRAIN TICKET Bookings or Paytm