Online payment turned eCommerce portal Paytm has recently taken a loan from ICICI Bank in two branches summing upto 300 cr. This move from the online marketplace indicates a deceleration in venture capital (VC) funding.
Even the last just, Paytm rival and one of country’s largest online marketplaces Flipkart announced that it had secured a funding of Rs 450 cr from HDFC Bank by pledging fixed deposits. The online retailer had also pledged other assets to avail credit worth Rs 1,400 cr from Kotak Mahindra Bank and Deutsche Bank in 2015.
As per Vijay Shekhar Sharma, Founder, Paytm calls it a capital management move to get credit lines for working capital on the back of security as FDs (fixed deposits), mutual funds, etc, to safeguard cash.
The Noida-based firm has pledged cash assets as security with the bank. In 2015, Paytm had taken a small loan of Rs 15 cr for working capital requirements from HDFC Bank which has been repaid by the company, shows RoC documents.
The Alibaba-backed firm kicked off as an online payment platform and later turned into being an eCommerce marketplace. Today it competes with the likes of Snapdeal, Flipkart and Amazon. Now the company is also gearing up to launch a payments bank, which would require additional capital. The company is hoping to garner fresh equity funds for this.