Digital and financial payments company Paytm is looking to divest its payment aggregator business to a new subsidiary Paytm Payments Services Limited, according to a notice sent to shareholders for approval.
The company is seeking approval from its shareholders at an extraordinary general meeting on September 23.
“To review and approve the transfer of the payment aggregation business to Paytm Payments Services Limited, a wholly-owned subsidiary of the company, in order to comply with the guidelines of the Reserve Bank of India, being considered a sale of company, ”said the EGM advisory issued on Aug. 31. The new entity will include Paytm’s online payment gateway business.
RBI’s guidelines for regulating payment aggregators (PAs) require that their activities be regulated and managed by a separate company, after being licensed by RBI. The indicative book value of the new entity is in the range of Rs 275-350 crore which will be paid to parent company One9 Communications (OCL) in five equal annual installments.
The actual consideration will be the derived base book value appearing as of August 31, 2021. OCL’s Paytm provides digital and payment services to consumers 33.3 crore and merchants over 2.1 crore, as of March 31, 2021.
The company reported a gross value of goods of over Rs 4 lakh crore for fiscal year 2020-21. The company is expected to launch its IPO of Rs 16,600 crore in October for which it has already filed draft documents with SEBI.
First publication: STI