IPO-bound Paytm will turn its payment aggregator business into a new subsidiary Paytm Payments Services Limited. This follows a directive from the Reserve Bank of India (RBI).
The company is seeking approval of the same from its shareholders through an Extraordinary General Meeting on September 23. This will include Paytm’s online payment gateway business.
The move to transfer payment aggregator business into a new subsidiary is as per RBI’s guidelines. RBI guidelines from March 17, 2020, for regulation of Payment Aggregators (PAs) required PAs business to be regulated and run by a separate company, after obtaining the license from RBI.
Indicative book value is in the range of Rs 275-350 crore ($39m-$50 m) which will be paid to Paytm parent One97 Communications in five equal annual installments. The actual consideration will be derived on the basis book value appearing as of August 31, 2021.
Source: Economic Times