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Razorpay Achieves Impressive Revenue Milestone in FY23 Despite Stagnant Bottom Line

Razorpay, a leading payment gateway and neo-banking platform, has demonstrated remarkable growth in the fiscal year 2022-23, with its revenue soaring to Rs 2,279 crore. This represents a substantial increase of 2.7 times from Rs 841 crore in FY21. However, despite this impressive revenue surge, the company's bottom line remained stagnant during FY23.

According to the consolidated financial statements sourced from the Registrar of Companies, Razorpay's revenue from operations experienced a notable uptick, climbing by 53.88% to reach Rs 2,279 crore in FY23 from Rs 1,4812 crore in FY22.

The primary revenue stream for Razorpay comes from the fees paid by merchants for transactions facilitated through its platform. Additionally, the company earned Rs 14 crore from interest and gains on financial assets, bringing its total income to Rs 2,293 crore in FY23.

Despite the revenue growth, Razorpay faced significant expenses, with employee benefits emerging as the largest cost center, constituting 28% of the overall expenditure. This cost escalated by 71% to Rs 638 crore in FY23 from Rs 373 crore in FY22, including Rs 65 crore attributed to ESOP costs settled in equity.

Various other operational costs, including those related to banking partners, servers, advertising, legal, and finance, contributed to a total expenditure of Rs 2283 crore in FY23, marking a 54.67% increase from the previous fiscal year.

The substantial rise in employee benefits impacted Razorpay's profitability, with the company's profits stabilizing at Rs 7.2 crore in FY23, compared to Rs 7.3 crore in FY22. The company's ROCE and EBITDA stood at 2% and 2.5% respectively.

Razorpay, which has raised over $800 million across rounds and was valued at around $7 billion in its last round, faces competition from players like Cashfree and PayU. However, the company remains optimistic about its future prospects, particularly after receiving the final payment aggregator (PA) license in December 2023, enabling it to onboard new customers.

Moreover, Razorpay recently announced achieving an annualized total payment volume (TPV) of $150 billion, attributing its growth to industry-first innovations, strategic acquisitions, and expansion efforts in the Southeast Asia region.

Looking ahead, Razorpay is in the process of relocating its domicile to India, with plans for an IPO in the next couple of years, as revealed by co-founder and CEO Harshil Mathur. The company anticipates concluding the domicile transition within the next six to 12 months, signaling its commitment to further expansion and development within the Indian market.


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