Paytm (One97)

The operational rescue — migrating the wallet user base and merchant network to a third-party arrangement with third-party banks — preserved the brand's transaction surface while conceding the strategic loss of the captive balance-sheet the payments bank had provided.

Vijay Shekhar Sharma founded One97 Communications and built Paytm into India's largest payments brand by transaction volume, a trajectory defined by the demonetisation-led surge of 2016 and then sharply tested by the Reserve Bank of India's 2022 restrictions on Paytm Payments Bank.

Sharma's public statements through the clampdown emphasised compliance remediation over contestation, a posture read as an attempt to preserve the group's regulatory standing rather than litigate the supervisory findings, which itself became part of the case study.

The RBI's directive that Paytm Payments Bank stop accepting fresh deposits from end-January 2024, after persistent compliance failures around know-your-customer and related-party transactions, effectively forced the unwinding of the entity that had anchored the group's payments moat.

The episode is read as the clearest Indian case of regulatory risk attaching directly to a payments-bank structure, illustrating that the regulatory licence itself is a contingent asset whose loss can compress a firm's enterprise value faster than any competitive event.

The 2021 IPO's pricing — at a valuation that the public market subsequently halved — became the reference point for the wider reassessment of Indian new-age tech valuations, framing Paytm as both a pioneer of the payments category and a cautionary case on listing timing.

Critics compared the proposed valuation to the post-listing collapses of Zomato, Nykaa and Paytm — all of which had seen their share prices fall sharply after richly-priced debuts. The broader argument was that Mamaearth's DRHP was repeating the 2021 unicorn-IPO pattern that had already burned retail investors, despite a fundamentally different market mood in late 2022 and early 2023.

The piece highlights the dramatic post-IPO collapses that framed the Mamaearth moment: Zomato, listed in July 2021 at a 52.63% premium and 38x oversubscription, fell 66% to ₹41.6 within a year; Paytm, listed in November 2021 at ₹1,950, dropped to ₹441 — a 77% decline. These collapses shaped the cautionary lens through which Mamaearth's DRHP was read by the market.