![]() ![]() What has been the reaction?Ī number of brokers have given their verdict on the result and updated their recommendations accordingly.Īccording to a note out of Jefferies, its analysts have retained their underperform rating and slashed their price target by 46% to a lowly $1.00. In addition, softening usage metrics and worsening credit losses weighed heavily on investor sentiment. While this is solid growth, it was still well short of the market’s expectations. In case you missed it, Zip reported third quarter transaction volume growth of 27% to $2.1 billion and quarterly revenue growth of 39% to $159.2 million. Investors have been selling down the Zip share price on Friday after brokers responded overwhelmingly negatively to the company’s third quarter update. Why is the Zip share price dropping today? In morning trade, the buy now pay later (BNPL) provider’s shares were down 6% to a new multi-year low of $1.08. “In India, competition isn’t such a bad thing because the total addressable market is growing so substantially and competition helps with the marketplace evolution, whereas in Australia, market share is kind of finite,” Mr Siva said.Ĭorrection: An earlier version of this story said Zip was planning to rebrand its US Quadpay unit when this had already been completed.The Zip Co Ltd (ASX: ZIP) share price has continued its slide on Friday. “Internet penetration and smartphone penetration has created the digital infrastructure to allow digital payments and the credit culture has evolved in a way that quasi-short term loans like buy now, pay later are in demand.”Īccording to Zip, India has the potential to become one of the largest markets globally and by FY2026, it is forecast to have $US300 billion in buy now, pay later payment volume.Īlongside ZestMoney, PAYMT is the largest digital payments company in India and is set to launch a $US2.2 billion float this year. “Traditionally, Indians have hoarded money in physical assets like gold and property, but the financialisation of the economy means people’s behaviour is changing as they get more access to credit,” said Mr Siva, pointing to the 1 billion Indians who now have a smartphone and the 750 million people connected to the internet. Mugunthan Siva, portfolio manager at India Avenue Investment Management, said the growth in digital payments, the proliferation of smartphones and India’s strengthening digital economy bode well for buy now, pay later growth. Zip funded the acquisition through the $400 million it raised through convertible notes in April, which boosted its cash position to $330 million as of June 30. Zip chief executive Larry Diamond said Indian citizens used the buy now, pay later feature as a tool to get short-term loans, compared with Australian users who are attracted to its convenience. It also has a point of presence in more than 75,000 physical stores. The Bengaluru-based fintech ZestMoney has 11 million registered users and more than 10,000 online merchants. Zip aims to take advantage of India’s evolving credit culture, as Prime Minister Narendra Modi’s sweeping shifts in the financial sector turbocharge digital payments and connect a fast-growing, digitally literate millennial population to global technology companies. Zip Co chief executive Larry Diamond sees India as an opportunity. The Sydney-based Zip will have the option to increase its shareholding in ZestMoney over time. ![]() Zip Co will enter the Indian market after stumping up $US50 million ($69 million) to buy a minority stake in fellow buy now, pay later company ZestMoney, deepening its move into emerging markets and doubling down on its global expansion plans.
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