One97 Communications (OCL), the firm which operates brand Paytm, is simplifying the company's group structure by bringing multiple business units under its direct control, and consolidating its offline merchants payments business.
The internal restructuring is aimed at streamlining the corporate structure of the company while enabling business efficiency by direct control over entities, it said.
Paytm said it transferred offline merchants payment business to Paytm Payments Services (PPSL) to comply with the Reserve Bank of India's norms on regulation of payment aggregators.
The consolidation of its online and offline merchant payments businesses will allow the company to operate them under a single regulated entity, which has received in-principle approval from the regulator for conducting online payment aggregation.
Paytm Financial Services (PFSL) will become OCL's wholly owned subsidiary after the company acquires around 51.2 per cent stake from founder Vijay Shekhar Sharma and VSS Investco, which is owned by Sharma, for up to Rs 50 lakh at fair value.
PFSL has investments in entities such as Admirable Software, Mobiquest Mobile Technologies, Urja Money Private, and Fincollect Services. These companies will become wholly-owned subsidiaries of OCL through direct and indirect shareholdings after it executes intra-group transactions.
Paytm will buy stake from Vijay Shekhar Sharma and his VSS Holdings in different insurance business units for an aggregate value of Rs 3.52 crore.
This includes a 51 per cent stake of Paytm Emerging Tech, PETL (formerly known as Paytm General Insurance Limited), 67.55 per cent of Paytm Insuretech Private and a 51 per cent stake of Paytm Life Insurance.
These insurance-related business units will become OCL's wholly-owned subsidiaries following the transaction.
It will also increase its stake in Little Internet 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.
-- Ajinkya Kawale, Business Standard
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