Vijay Shekhar Sharma | Struggled Entrepreneur

For entrepreneurs, seeing their company featured on the stock exchange can certainly be overwhelming. Vijay Shekhar Sharma, Founder and CEO of One97 Communications, was no different. He had a reputation for taking care of himself. He burst into tears when the national anthem was played on November 18, 2021, the day One97 went public.

A 43-year-old man from Aligarh said in an interview that he cried when he heard the line ‘Bharat Bhagya Vidhata’. According to him, the line, which translates as “India will decide its own destiny”, best conveys what Paytm was trying to achieve.

He built Paytm into a digital payments powerhouse. But more than two years after going public, the powerhouse is facing a number of headwinds, including regulatory hurdles and wavering investor confidence.

The journey so far hasn’t been easy for Sharma. All his schooling was in Hindi. The smooth sailing took a turn for the worse when he had to adapt to English classes at Delhi Institute of Technology.

“I went from the front row bench to the back row and eventually dropped out of the class,” he told YouTube channel MindBatteries. He found solace in his center programming computers.

He thought his prospects for employment were slim. That’s when his entrepreneurial secret came when he explored whether he could become a “job provider” instead. At the time, he was already working on a venture called “XS” to build content management systems. In 1999, he sold his company and received “a few hundred thousand yen” each week in installments.

One97 Communications was founded in 2000. Initially, his monthly income was around ₹10,000. This young entrepreneur faced financial difficulties and was forced to sell his 40% of the company’s shares for his 800,000 rupees ahead of his sister’s marriage.

Arrival of Paytm

One97 ran on bootstrap for 7 years. The company offered Internet content via SMS alongside its USSD-based services.

Paytm is an acronym for Pay-Through-Mobile and was founded in December 2010 as a B2C brand.

Sharma’s operational rationale is perhaps best expressed in a 2015 interview. Asked if he was a disruptor, Sharma argued that technology was simply eliminating “the redundant”: cash. He said cash is bad for the economy because it “encourages corruption, is difficult to carry, and is expensive.” His other aspect of this initiative was to achieve financial inclusion by “bringing 500 million Indians into the credit note circle”.

The payments platform’s foray into lending was the next step. Additionally, in order to be profitable, it was important that cash flowed from the company’s own balance sheet, rather than being distributed to third parties. This is to reduce costs. This ambition is only possible by obtaining a small finance bank license.

However, repeated clashes with regulators over compliance issues such as violations of KYC norms, governance issues and lack of risk profiling have left the company in trouble and its ambitions undermined. On January 31, the RBI asked Paytm to suspend its payments banking business, leading to a collapse in the stock price. On February 26, Mr. Sharma resigned as non-executive chairman of Paytm Payments Bank.

In the larger context, a former central bank official told the online publication Founding Fuel, “I wasn’t sure he understood what the regulations meant and how seriously to engage with us.” . The official said Mr Sharma would be found crying “crocodile tears” during the visit and “laughing loudly” outside.

Moreover, Mr. Sharma often seems particularly instinctive. “It’s a decision based on opinion, not intuition or data. I do this because I think I like this,” he once explained. His idea is to “build better products by iterating faster.”

The impact of his conflict can best be gauged from One97’s stock price. He has not recovered his debut price of ₹1,955 at BSE till date. He closed his trade at ₹414 after the special deal ended on Saturday.

Perhaps not for the first time in his life, Sharma lives to fight another day while trying to maintain a profitable paradigm.