![]() ![]() In theory, they could do (sell) more but there is no indication of that,” this person added. Ant has agreed to come down under 25% through the OFS. “It is a requirement that no one should own more than 25% in the company for it to be listed as a professionally managed company. “That’s due to the nature of the local regulations and not about foreign shareholders,” another person in the know said.Īs ET reported on July 16, China’s Ant group has finalised plans to reduce its stake in Paytm to below 25% from nearly 30% to comply with the listing regulations for professionally managed companies. Interestingly, for both its payments bank and insurance business, a majority shareholding is with Sharma. Paytm Payments Bank has been operational for a little over four years. ![]() Currently, payments banks need to operate for a minimum of five years before they can convert into a small finance bank. Paytm’s payments bank can’t lend on its own as per the regulations, so it also wants to convert itself into a small finance bank. Sharma owns nearly 15% in One97 Communications.Īs reported previously, Paytm is also seeking an NBFC (non-banking financial company) licence.įor now, the company is lending through partner NBFCs and banks. The balance is owned by One97 Communications. The acquisition of the general insurance venture, awaiting regulatory approval, will be routed through Paytm subsidiary QorQl where Sharma holds a 51% stake. So, there is a possibility that he may not need that loan,” this person said. There is an OFS (offer for sale) where Sharma is selling. “The shareholder approval is there (on the loan) but it hasn’t been disbursed yet. “The structure of how exactly the insurance transaction should be has gone through some back and forth because they (Paytm) have to take regulatory input and may have to bring in a partner who can add expertise, besides provide compliances at One97 Communications level,” a person close to the matter said. The board of One97 has approved the loan proposal but the Paytm founder is keeping both options open to fund this buy, people aware of the matter said. Local rules allow foreign companies to own 100% of broking companies.įor Paytm, closing the general insurance purchase is critical to its positioning as a financial services group diversifying from being just a digital payments firm.įounder and chief executive Vijay Shekhar Sharma, who is also selling a part of his stake through the IPO, may use part of the proceeds to finance the insurance purchase.ĮT had reported in June that Paytm parent One97 Communications was issuing a loan to Sharma's VSS Holdings for financing the insurance transaction. Paytm owns an insurance broker license through a wholly owned subsidiary, Paytm Insurance Broking. ![]()
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