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September 2, 2021

Paytm to set up subsidiary to run payment aggregator business

By Shalini mani

Indian payment firm Paytm is looking to transfer its payment aggregator business to a new subsidiary, Paytm Payments Services.

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  • ESG
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  • Mobile payments
  • Alternative payment rails (Real-Time Payments, Blockchain, BNPL)
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  • Regulations
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The move comes as the deadline to adhere to the payment aggregator rules mandated by the Reserve Bank of India’s (RBI) closes by.

RBI has directed payment aggregators to be operated as a separate company after obtaining a licence from the central bank, effective January 2022.

Paytm will seek approval from its shareholders to form the new subsidiary in an extraordinary general meeting later this month.

According to a notice sent to its shareholders by the firm, the transfer will have an indicative book value between $39m to $50m.

The firm plans to pay the amount in five equal annual instalments.

Meanwhile, Paytm is also preparing for its stock market debut.

In July 2021, the firm filed a draft prospectus for its $2.2bn initial public offering (IPO) with the Securities and Exchange Board of India.

It is expected to announce the IPO date once it is granted approval by the market regulator.

As part of the IPO, Paytm plans to raise $1.1bn through the issue of new shares and the rest through an offer sale.

According to a recent filing with SEBI, the firm will use the fresh capital of $577m to further expand its payments services offering.

It also plans to utilise about $269m to propel expansion into new initiatives and explore acquisition opportunities.

Founded by Vijay Shekhar Sharma in 2009, Paytm allows users to make digital payments from their phones and top-up credit.

In addition to digital payments, the firm provides services such as banking, credit cards, financial services, wealth management, and digital wallets.

Free Report
img

Prepare for changes in the Payments market

 The Payments market has seen drastic changes in the past few years, with this only expected to continue. What does your company need to do to prepare for what’s to come? GlobalData’s Payment Trends for 2022 report explores the key trends in technology, consumer habits, and regulations shaping the market. We also identify the leading companies in this changing market, giving you a competitive market outlook. This report covers the impact of:
  • ESG
  • E-commerce
  • Mobile payments
  • Alternative payment rails (Real-Time Payments, Blockchain, BNPL)
  • Fraud & Cybersecurity
  • Regulations
Download the report now to learn essential strategies to maximize your growth in the face of rapid change.
by GlobalData
Enter your details here to receive your free Report.

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