Paytm’s shares closed at ₹467.25 apiece on July 12, 2024. File
| Photo Credit: REUTERS

Japan’s Softbank investment arm Softbank Vision Fund exited from Paytm in the June quarter at a loss of around $150 million, sources aware of the development said.

Softbank invested about $1.5 billion in One97 Communications, the owner of Paytm brand, in tranches in 2017. “Softbank has exited Paytm at a loss of 10-12%. The total loss is around $150 million,” one of the sources said.

Softbank held around 18.5% stake in Paytm before the company’s initial public offering (IPO) in 2021. It held a 17.3% stake through SVF India Holdings (Cayman) Ltd and 1.2% through SVF Panther (Cayman) Ltd.

SVF Panther sold its entire stake during the IPO for ₹1,689 crore, about $225 million.

“Softbank announced that it will exit Paytm in 24 months from the time of the IPO. The exit was in line with Softbank’s plan. However, the company did anticipate loss at that time,” another source said.

Softbank had acquired Paytm shares at an average price of about ₹800 apiece.

Paytm share price was listed at ₹1,955, lower by 9%, and has not matched its issue price of ₹2,150 apiece to date.

The share price of Paytm plummeted further after the Reserve Bank of India (RBI) banned its associate firm Paytm Payments Bank Ltd (PPBL) from carrying out transactions. It touched an all-time low of Rs 310 on May 9.

Paytm reported widening of losses to ₹550 crore in the fourth quarter of 2023-24 following the ban on transactions related to its payments bank.

The company during the reported quarter wrote off ₹227 crore investment for a 39% stake in PPBL following future uncertainties associated with its business operations, including the uncertainty of any other regulatory development, etc.

For the year ended March 31, 2024, the company’s loss narrowed to ₹1,422.4 crore. Paytm had recorded a loss of ₹1,776.5 crore in FY23.

Billionaire Warren Buffet’s Berkshire Hathaway Inc also exited Paytm around seven months back by selling shares at a lower-than-acquired price.

The company had acquired 2.6% stake in Paytm for ₹1,279.7 per share at an aggregate value of ₹2,179 crore, as per an official document.

The shares were disposed of at an average price of ₹877.29 apiece, taking the transaction value to ₹1,370.63 crore in November. Paytm’s shares closed at ₹467.25 apiece on Friday.

Paytm is in talks with Zomato to sell its movie and events ticketing business, according to people familiar with the matter, as the beleaguered fintech company carves a revival strategy amid weakening sales.

The discussions between Paytm, officially known as One97 Communications Ltd, and online food delivery firm Zomato are in advanced stages, though there are other suitors for the business, the people said, declining to be named as the matter is private. Talks are ongoing and no final decision has been made, the people said.

Paytm, run by billionaire founder-CEO Vijay Shekhar Sharma, last month reported its first sales decline on record and vowed to trim non-core assets. It also warned of job cuts, reflecting the fallout from regulatory action on Paytm Payments Bank Ltd. that’s curtailed much of the fintech’s business and forced it to forge new partnerships with lenders.

Paytm does not control the bank but relied on it for digital wallets and payments traffic before the central bank’s move earlier this year.

Paytm and Zomato did not respond to requests for comment outside of regular business hours.

Paytm does not disclose standalone numbers for its movie and events ticketing business. It reported annual sales of 17.4 billion rupees ($208 million) in the fiscal year through March 2024 in its marketing services business, which includes movie and events as well as credit card marketing and gift vouchers.

The sale, if successful, will allow Paytm to sharpen its focus on travel, deals, and cash backs – businesses that are important to broaden its merchant base and grow its own sales.

The purchase could help Zomato expand its digital business into a new high-growth area. In 2020, it acquired Uber Technologies Inc.’s India food unit.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The logo of the Paytm app. File
| Photo Credit: Reuters

Fintech firm One97 Communications, owner of the Paytm brand, is laying off an undisclosed number of employees and claimed that it is providing outplacement support for their smooth transition, according to a company statement.

Paytm’s sales employee headcount in the March 2024 quarter dropped by about 3,500 to 36,521 personnel on a quarter-on-quarter basis, mainly due to the impact of the Reserve Bank of India’s (RBI) ban on services of Paytm Payments Bank.

“One97 Communications Limited (OCL) is providing outplacement support to employees who have resigned as a part of the restructuring efforts by the company. The company’s human resource teams are actively collaborating with over 30 companies that are currently hiring, and providing assistance to employees who have opted to share their information, facilitating their immediate outplacement,” the company said on June 10.

Paytm did not disclose the number of employees impacted by the restructuring. “Paytm is also disbursing bonuses which were due to employees, ensuring fairness and transparency in the process,” the statement said.

Paytm has reported a widening loss to ₹550 crore in January-March 2024, after the baned transactions related to its payments bank.

The RBI had barred Paytm Payments Bank Limited (PPBL) from accepting deposits, credit transactions or top-ups in any customer accounts, wallets, and FASTags, keeping in view the interest of customers, including merchants from March 15 onwards.

The company had posted a loss of ₹167.5 crore in the same period a year ago. “As part of its FY24 earnings release, One97 Communications stated that it will be pruning its non-core business lines, and will continue its efforts to maintain a leaner organisation structure through AI-led interventions. The company has been actively working towards driving profitability, in line with its guidance,” the statement said.

Image for representational purposes only.
| Photo Credit: REUTERS

Fintech firm One97 Communications, which owns the Paytm brand, on May 22 said its loss in the fourth quarter of the financial year 2023-24 has widened to ₹550 crore.

The company had posted a loss of ₹167.5 crore in the same period a year ago, the company said in a regulatory filing.

The revenue from operations of Paytm declined 2.8% to ₹2,267.1 crore during the reported quarter, from ₹2,464.6 crore in the corresponding quarter of the financial year 2023.

For the year ended March 31, 2024, the company’s loss narrowed to ₹1,422.4 crore. Paytm had recorded a loss of ₹1,776.5 crore in FY23.

The annual revenue of Paytm increased by about 25% to ₹9,978 crore for FY24, from ₹7,990.3 crore in FY23.

The Reserve Bank of India (RBI) barred Paytm Payments Bank Limited (PPBL) from accepting deposits, credit transactions or top-ups in any customer accounts, wallets, and FASTags, keeping in view the interest of customers, including merchants from March 15 onwards.

Paytm had estimated a ₹300-500 crore loss due to the RBI’s restriction on PPBL.

New Delhi:

Digital payments firm Paytm posted a wider loss in the fiscal fourth quarter on Wednesday, hurt by weakness in its payments and financial services business after the central bank shut down its banking unit.

The company’s consolidated net loss was at Rs 5.5 billion as it took an impairment of Rs 2.27 billion towards scaling down the business of Paytm Payments Bank.

Paytm had reported a loss of Rs 1.68 billion a year ago in the March-quarter.

Meanwhile, its consolidated revenue from operations fell to Rs 22.67 billion ($272.3 million) for the January-March quarter from Rs 23.35 billion a year earlier.

The Reserve Bank of India had ordered Paytm Payments Bank, an associate of Paytm, to stop accepting fresh deposits in its accounts or digital wallets from March, raising concerns about revenue from the company’s main payments business.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The board of India’s Paytm Payments Bank is independent and capable of addressing regulatory concerns, the chief executive officer of digital payments firm Paytm, formally known as One97 Communications Ltd, (OCL) said on Monday.

“I, personally or anyone from OCL, have no connection with the payments bank,” Vijay Shekhar Sharma said at a webinar.

“There is an independent board taking care of everything and we have full faith in their capability.”

The Reserve Bank of India (RBI) in late January had ordered Paytm Payments Bank to stop accepting new deposits in its accounts or digital wallets from March, citing supervisory concerns and persistent non-compliance with rules.

Paytm Payments Bank’s parent is One 97 Communications, popularly known as Paytm for its digital payments app.

One97 owns 49% in the payments bank, while Mr Sharma holds the remaining 51%.

In February, following the RBI’s order, Mr Sharma stepped down as non-executive chairman and board member of Paytm Payments Bank.

 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Paytm, a major player in India’s fintech scene, is facing a setback as its banking arm, Paytm Payments Bank Ltd (PPBL), is stopping key services from today. This comes after the Reserve Bank of India imposed restrictions on the bank, citing serious rule violations. Customers relying on digital payments are advised to find alternative banking solutions.

These services to stop from today:

• Paytm Payments Bank customers can no longer deposit money into their accounts, but can still withdraw or transfer funds.
• Users will no longer get salary credits, direct benefit transfers, and subsidies in their Paytm Payments Bank account, but will still continue to get refunds, cashbacks, and sweep-ins from partner banks.
• Users cannot top-up their wallets or transfer funds from their Paytm wallet, however, they can still use the money in their wallet to pay bills.
• Customers will not be able to recharge their FASTag issued by the Paytm bank.
• Recharging NCMC cards from Paytm Bank will not be possible. 
• Users won’t be able to transfer funds into Paytm Payments Bank accounts through UPI or IMPS.
• Customers can still use their Paytm balance to pay for subscriptions, but they will have to use a different bank account from March 15.

However, the Paytm app will keep running even after March 15. Your services will not be affected if you do not have a Paytm Payments Bank account. You can still use UPI services through the Paytm app, as long as it is linked to another bank. 

Paytm’s parent company, One97 Communications, got approval from the National Payments Corporation of India (NPCI) to continue offering UPI services as a Third-Party Application Provider (TPAP). Under this new setup, Paytm will partner with banks like SBI, Yes Bank, Axis Bank, HDFC Bank, etc, which will handle payment services for Paytm users. 

You can keep using the Paytm app for all your bill payments and recharges. Your Paytm QR code, soundbox, and the card machine will also remain operational.

Shares of India’s Paytm rose a stock exchange-allowed maximum of 5% on Friday, March 15, 2024, a day after it got a third-party application provider license that will allow it to offer digital payments after its banking unit ceases operations.

The license, granted by the country’s payments authority, came as Paytm Payments Bank will cease to operate on March 15, following regulatory action due to non-compliance with certain norms.

Paytm’s shares were up 5% at 370.70 rupees early in the session, set for its best day in two weeks, with its trading volume of over 4 million shares already making it the stock’s fourth busiest day this month.

Still, the stock has just over halved in value since late January when the Reserve Bank of India ordered Paytm Payments Bank to stop accepting fresh deposits in its accounts or popular wallets.

The third-party app provider license, brokerage UBS said in a note, means Paytm will operate like its competitors such as Google Pay and PhonePe, likely shifting investor focus to operational performance over regulatory headwinds.

However, Jefferies said that for Paytm to retain customers and merchants, it will have to dip into its cash reserves of 85 billion rupees ($1.02 billion).

-Indian digital payments firm Paytm, formally known as One 97 Communications, was on Thursday granted a third-party application provider license by the country’s payments authority, which will enable it to facilitate payments after its banking unit ceases operations.

The license will allow customers to continue using the Paytm app for payments through India’s popular unified payment interface (UPI), after Paytm Payments Bank ceases operations by March 15, following regulatory action due to non-compliance with certain norms.

Axis Bank, HDFC Bank, State Bank of India and Yes Bank will act as payment system provider banks to Paytm, the National Payments Corporation of India (NPCI) said in a statement.

Yes Bank shall also act as a merchant acquiring bank for existing and new UPI merchants for Paytm, it added.

Paytm has been advised to complete the migration for all existing handles and mandates, wherever required, to new payment system provider banks at the earliest, the NPCI said.

UPI is India’s real-time payments system that allows users to transfer money across banks.

Paytm, the third-largest app for UPI payments in the country, processed 1.41 billion monthly transactions worth 1.65 trillion rupees in February, down from 1.57 billion transactions worth 1.93 trillion in January, according to data on the NPCI website.

PhonePe and Google Pay are the two largest UPI payment apps in India.

Last month, the Reserve Bank of India (RBI) had asked the NPCI to examine a request from Paytm to become a third-party application provider.

Early this week, Reuters was the first to report that the NCPI was likely to approve a third-party application provider (TPAP) license for Paytm.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

New Delhi:

Paytm CEO Vijay Shekhar Sharma on Monday resigned as non-executive chairman and board member of Paytm Payments Bank, amid ongoing regulatory challenges faced by the digital payments giant. The decision follows a series of measures imposed by the Reserve Bank of India (RBI), including an order for Paytm Payments Bank to wind down operations by March 15 due to persistent compliance issues and supervisory concerns.

The RBI’s action against the payments bank stemmed from various concerns, including inadequate customer identity checks and a perceived lack of arms-length distance from the parent company, Paytm. These issues prompted a major board overhaul, with former chairman of Central Bank of India, Srinivasan Sridhar, former Bank of Baroda Executive Director Ashok Kumar Garg, and two retired Indian Administrative Service (IAS) officers joining the payments bank’s board.

Paytm’s decision to reconstruct the board with independent and executive directors is seen as an effort to demonstrate compliance with regulatory norms and salvage the situation. While the RBI did not explicitly mandate the board reconstruction, it is speculated that the move aims to reassure the regulatory body about Paytm’s commitment to adhering to norms.

Why Vijay Shekhar Sharma Quit

Mr Sharma owns a 51 per cent stake in Paytm Payments Bank while One 97 Communications, as Paytm was formally known, owns the rest. Mr Sharma said that his resignation from the board and the appointment of independent directors were strategic steps to enable a smooth transition and enhance governance structures. The move is also seen as an attempt to disassociate Paytm from its payments bank unit and position it as an independent entity.

The regulatory challenges faced by Paytm have impacted its stock value, with a significant drop since the RBI’s order. However, the stock has shown signs of recovery, attributed to Paytm’s partnership with new banking entities and the RBI extending the deadline for winding down the payment bank’s operations.

Nirmala Sitharaman’s Action

Finance Minister Nirmala Sitharaman on Monday convened a meeting with representatives from the fintech industry to discuss their concerns and issues. However, the developments at Paytm Payments Bank were not specifically addressed during this meeting, according to two government officials who were present, reports Reuters.

In response to the crisis, the finance ministry has announced plans to hold discussions with Indian law enforcement agencies and fintech firms in the near future. This upcoming meeting aims to facilitate communication between fintech firms and various enforcement agencies, as mentioned in a statement released by the ministry.

The concerns raised by some listed fintech companies regarding their ownership structures will be examined by both the central bank and the government. This move signals a broader effort to enhance transparency and accountability in the fintech sector.

Additionally, the government has pledged to simplify ‘know your customer’ (KYC) norms across the fintech space. Simplifying KYC requirements could streamline onboarding processes for users, potentially addressing some of the operational challenges faced by fintech firms.