Paytm seeks shareholders' nod to create firm for payments business

IPO-bound Paytm is seeking approval from its shareholders in an extraordinary general me­eting (EGM) on September 23, to turn its payment aggregator business into a new subsidiary called Paytm Payments Ser­vices Limited.

 

This follows a directive from the Reserve Bank of India (RBI).

 

In a notice to shareholders, Paytm sought approval from them to “consider and ap­prove transfer of payment ag­gregator business to Paytm Pay­ments Services, a who­­lly-owned arm of the company, to comply with the RBI guidelines”.

 

Accordingly in order to me­et the requirements issued by the RBI, Paytm had incorporated on October 10, 2020, a new entity called ‘Paytm Pay­ment Services Limited’, as it’s wholly-owned subsidiary company.

 

Indicative book value of PSSL is in the range of Rs 275-350 crore ($39 million-$50 million) which will be paid to One97 Communications Limited (OCL), Paytm's parent firm, in five equal annual instalments. The actual consideration will be decided based on the book value appearing as of August 31, 2021.