Paytm to file for new licence, says bullish on insurance plan
NEW DELHI: Digital payments and financial services company Paytm will seek a new general insurance licence with a fresh application with the aim of gaining majority shareholding with a 74% upfront equity stake, it said.
In a regulatory filing, Paytm reiterated its intention to make inroads in the general insurance sector as it is extremely bullish about its potential.
”We intend to seek approvals for a new general insurance licence, wherein we hold a 74% majority shareholding upfront,” it said.
Paytm is synonymous with digital payments in India - having pioneered the quick response code or QR code and wallet trends in the country. It has also forayed into financial services with its partner-based lending business recording rapid growth.
This, along with the growing technology-led insurance penetration in India, now gives the company confidence to file for a new application, where One 97 Communications Ltd, the parent firm of Paytm, will have a direct majority shareholding instead of the earlier proposed fully-diluted shareholding of 11%.
The decision to seek approval for a new license comes after Paytm and Raheja QBE mutually agreed to discontinue the proposed acquisition of RQBE.
The company in the exchange filing said, “Our associate company, Paytm Insuretech Private Limited, had entered into a share purchase agreement to acquire 100% of Raheja QBE General Insurance Company Limited. As the share sale and purchase transaction has not been consummated within the time period envisaged by the parties under the said agreement, the agreement has automatically terminated.” In a separate filing on Sunday, Paytm shared its business operating update for the month of April. Paytm’s lending business now has an annualized run rate of ₹20,000 crore.
In April alone, the company has disbursed 2.6 million loans through its platform worth ₹1,657 crore ($221 million). The company also recorded more than 100% year-on-year growth in total merchant payments volume aggregating to ₹0.95 lakh crore ($12.7 billion).
Paytm’s monthly transacting users stood at 73.5 million. In the offline payments segment, the company’s total device deployment across India has crossed 3 million.