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    Paytm Denies Adani Acquisition Rumors

    One97 Communications, the parent company of Paytm, has denied all rumors of their potential acquisition by Adani Enterprises. In a stock exchange filing, it called the news “speculative” and said that the company is not engaged in any discussions in this regard.

    Reports of Adani looking to acquire a stake in the payments company emerged on May 29, in the Times of India, where an unnamed source reported Paytm founder & CEO Vijay Shekhar Sharma met Adani at the latter’s office in Ahmedabad on Tuesday to “finalize the contours of a deal.”

    Paytm is currently observing a downswing in its revenues following the restrictions imposed on Paytm Payments Bank Limited (PBBL) by the RBI for “persistent non-compliance with and continued material supervisory concerns in the bank.” PBBL was ordered to:

    • Stop further deposits, credit transactions, or top-ups 
    • Stop fund transfers, Bharath Bill Pay, and UPI facility after February 29
    • Terminate the nodal accounts of One97 Communications Limited and Paytm Payments Services Limited
    • Settle all pipeline transactions and nodal account

    Following this, in the final quarter of FY24, Paytm reported a poor operating revenue dipping to Rs. 2267 crore in March 2024 from a high-point in December 2023 of Rs. 2850 crore, a 20% Quarter on Quarter decrease. Similarly, the contribution profit had a 15% QoQ decline to reach Rs. 1288 crore in March 2024 from Rs. 1520 crore in December 2023. The earnings before interest, taxes, depreciation, and amortization (EBITDA) before employee stock ownership (ESOPs) also declined from Rs. 219 crore in December 2023 to Rs. 103 crore in March 2024. Monthly Transacting Users (MTU) were also down by 24% in April as compared to January, from 10.4 cr to 8 cr.

    However, in a strategic move, Paytm has chosen to create a  “leaner organization structure” by “pruning non-core businesses”, their earnings report revealed. On May 25, Paytm’s associate entity Paytm General Insurance Limited (PGIL) withdrew its application for registering as a general insurance company with the Insurance Regulatory and Development Authority of India (IRDAI) for manufacturing of general insurance products. The company said this will help it conserve Rs. 950 crores which was “earmarked for investment in PGIL.” Rather than manufacturing general insurance products, the company said it would focus on the distribution of insurance products via Paytm Insurance Broking Private Ltd. (PIBPL). This move could indicate a shift towards far more concentrated business avenues for Paytm in the future.

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    The post Paytm Denies Adani Acquisition Rumors appeared first on MEDIANAMA.

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