Post-Covid-19, more investors are doing risk management: Paytm Money CEO

Lot of users have done averaging and bought when the market was down, says CEO, foresees less flow of new funds in December 2021 and January 2022

Post Covid-19, investors have become "unemotional" about their investments and are undertaking risk management, digital broking solutions provider Paytm Money has found.

"Finally people are doing risk management. There is a growing maturity among investors in terms of risk management. Post Covid, people have become unemotional and are booking profits and stop-loss more. This is going to be one of the big trends in wealth in the next decade," said Varun Sridhar, CEO, Paytm Money.

Talking about behavioural change among Paytm Money users during the recent fall in markets, Sridhar said that a lot of users had done averaging and bought when the market was down. "They did not buy immediately but waited for the market to correct further before buying."

However, the current trends are showing a decline in new funds influx. "People are spending more on themselves now. There will be less flow of new funds in December 2021 and January 2022," Sridhar added.

Paytm Money has over 10 million users with over 20 million transactions annually, resulting in investments of over Rs 7500 crore and 30 per cent market share in direct SIPs. Among revenue sources for Paytm Money include brokerage charges, share in fee from advisory revenue, charges on education products and other cross selling from Paytm.

Currently, 35 per cent of new account additions are below the age of 25 years and the numbers are increasing monthly at a rate of 15 per cent. Since September 2020, Paytm Money has 600,000 accounts and is adding 100,000 accounts now every month.

"We are 14th among digital brokerages while in terms of new monthly account additions we are 7th or 8th ranked. We will compete on pricing since users first need a good price followed by a good product. We are the only super-app in India in wealth with a gamut of services across the board including management, F&O and advisory. Competition is really tough but we will take three years to gain consumer trust," said Sridhar.

Talking about future plans, Sridhar said that the firm was developing products in knowledge and advice verticals, apart from algorithms for post market hours trading. "We are thinking why finance should be done only when markets are open and not at the convenience of users."

Recently, the wholly-owned subsidiary of Paytm launched its first wealth management sales office in the country at Ahmedabad.

"With over 100,000 existing users, Gujarat is already one of the top states in terms of transaction volume on the Paytm Money platform. More than 11 per cent of the IPO applications on the platform come from Gujarat, making it the most important region in the country. Also, these users have the highest participation in F&O trading and ETF investments. Now, with a physical presence in Ahmedabad, Paytm Money is aiming to accelerate the onboarding of new users from the state and increase the overall relationship value & trading volumes," said Sridhar.

Over the last 12 months, Paytm Money has launched a slew of new products and services aimed at empowering seasoned investors as well as new-to-investment users, including features like Margin Pledge, GTT, F&O Dashboard, and voice trading, among others. In voice trading, Paytm Money has already seen a 60 per cent accuracy in transactions.

Recently, the firm also introduced Portfolio Management Services (PMS), which is an investment service offered to HNIs with SEBI mandating a minimum investment of Rs 50 lakhs - through a tie up with PMS Bazaar. The platform also enables users to attend live sessions in Paytm Wealth Community conducted by subject matter experts across an array of wealth topics like Stocks, F&O, IPO, ETFs, Mutual Funds and Personal Finance.