Paytm transfers offline merchant payments to PPSL to comply with RBI norms

One 97 Communications Ltd, the parent company of Paytm, has approved the transfer of its offline merchant payments business to its wholly owned subsidiary, Paytm Payments Services Ltd (PPSL), to comply with the Reserve Bank of India's guidelines for payment aggregators.

In a stock exchange filing, the company said the proposed transfer will consolidate the group's online and offline merchant payments businesses under PPSL, which has received in-principle approval from the RBI to carry out a payment aggregator (Online) business.

The company said this will ensure that all payment aggregation activities are housed within one regulated entity and will build efficiency and synergy within the group.

 

The Offline Merchant Payments Business includes merchants serviced through QR codes, Soundbox, and EDC machine payments. The transfer will be executed through a slump sale on a going-concern basis, subject to the approval of shareholders and the board of PPSL. Since this is a transfer to a wholly owned subsidiary, it will not impact the financials of the company on a consolidated basis.

"The transfer is being undertaken to take steps to comply with the Reserve Bank of India's Master Directions on Regulation of Payment Aggregators dated September 15, 2025," the filing said.

"The proposed transfer will result in consolidation of the group's Online and Offline Merchant Payments Businesses under PPSL, which has received in-principle approval from RBI to carry out PAO (Payment Aggregator Online) business."  This will ensure that all payment aggregation activities are housed within one regulated entity and will build efficiency and synergy within the group.

The filing stated that "the transfer is proposed to be carried out at book value, given that it forms part of an internal restructuring intended to consolidate the related business within a dedicated wholly owned subsidiary, in alignment with applicable regulatory requirements and to achieve operational efficiency. As the transaction is between the holding company and its wholly owned subsidiary, there is no change in the ultimate beneficial ownership or control."  For the financial year 2024-25, the Offline Merchant Payments Business reported revenue of about Rs 2,580 crore, representing about 47 per cent of the total revenue of the company on a standalone basis. The net worth of the transferred undertaking as on March 31, 2025, stood at about Rs 960 crore, representing 7.45 per cent of the company's standalone net worth.

The completion of the transfer is expected on or before December 31, 2025, subject to necessary shareholder and board approvals and completion of other conditions under the Business Transfer Agreement.

The company said the proposed transaction does not form part of any Scheme of Arrangement and will be undertaken through a Business Transfer Agreement between the company and PPSL.  Paytm brings key entities under direct ownership  In another company development, One 97 Communications Ltd also approved a comprehensive internal restructuring plan to bring several of its financial and technology subsidiaries under direct ownership.

The Board of Directors approved the transactions, describing the move as a step towards simplifying the group structure and creating certain subsidiary ownership changes, the firm said.

 

The company said all transactions were independently valued and undertaken on an arm's length basis as per regulatory provisions.

 

The move is aimed at simplifying corporate structure, improving transparency and efficiency.

 

As part of the plan, the company will acquire around 51.22 per cent equity in Paytm Financial Services Limited from founder Vijay Shekhar Sharma and his wholly owned entity VSS Investco Private Limited for up to Rs 0.5 crore at fair value. Following this, Paytm Financial Services will become a wholly owned subsidiary of the company. Entities where PSFL holds investments, Admirable Software, Mobiquest Mobile Technologies, Urja Money and Fincollect Services will also become wholly owned subsidiaries through direct and indirect ownership.

 

The company will further simplify this structure by transferring the shareholdings of Admirable, Mobiquest, Urja, and Fincollect directly under One 97 Communications through intra-group transactions. Admirable Software, engaged in technology services, reported total income of Rs 0.44 crore in FY25, while Mobiquest, a loyalty and technology services firm, reported Rs 33.43 crore. Urja Money earned Rs 18.59 crore in FY25, and Fincollect, a collection services company, recorded Rs 220.47 crore.

 

Paytm will also acquire the remaining stakes in Paytm Emerging Tech Limited (formerly Paytm General Insurance), Paytm Insuretech, and Paytm Life Insurance from Sharma and his 100 per cent-owned entities for a combined consideration of up to Rs 3.52 crore, based on net asset value. Each of these entities will become wholly owned subsidiaries. Paytm Emerging Tech is engaged in technology services, while Paytm Insuretech provides manpower services and reported Rs 0.49 crore in FY25. Paytm Life Insurance is also engaged in technology services.

 

Additionally, the company will increase its stake in Little Internet Private Limited from 62.53 per cent to about 78 per cent through the conversion of optionally convertible debentures and inter-corporate deposits worth approximately Rs 15 crore at face value.

 

The company stated that these related-party transactions have been undertaken at fair market value in compliance with SEBI's Listing Obligations and Disclosure Requirements and the SEBI Master Circular. It added that the restructuring will simplify ownership, strengthen governance, and bring greater agility to operations without any change in ultimate ownership.

 

All acquisitions are expected to be completed by January 31, 2026.