Paytm is soon going to launch its payments bank service in the country, in which founder and CEO Vijay Sharma holds a 51% stake. To invest money for the payments bank business, he has sold his 1% stake in One97 Communications to its shareholders for Rs. 325 crore.
While it is said that the shareholders have bought the 1 percent share of the company, details related to the deal remain undisclosed. Confirming this development, the company’s spokesperson said that it has been done for Paytm’s payments bank investment.
At the end of March this year, Vijay Sharma held 21.33 percent stake in One97 Communications. The latest sale would bring down his holding to over 20.33 percent. This transaction values One97 Communications at about $4.7 billion.
Last year, the Reserve Bank of India had awarded ‘in-principle’ approval to Sharma, the founder of One97 Communications, to set up a payments bank. Under RBI rules, Vijay Sharma should hold at least 51% stake in the payments bank.
Thus, he created a new entity called Paytm Payments Bank, in which he holds 51 percent. Along with that, he has also created a new entity called Paytm E-Commerce Private Limited, which houses the commerce marketplace business.
Paytm Payments Bank is currently in the process of securing the final licence from RBI and will commence its operations after due approvals. While Vijay Sharma holds a majority share, the rest is being held by One97 Communications.
Earlier this week, the company restructured its business by merging Paytm’s wallet business with payments bank operation, mandatory step to fulfill the rules laid out by the RBI. The transfer will be complete once the payment bank licence is received.
While Chinese entities Alibaba and Ant Financial Services holds over 40 percent stake in One97 Communications, they will not have a direct shareholding in the payments bank.
Paytm is also currently looking to raise a fresh funding round. It aims to raise around $250-300 million, out of which, $60 million has already come from Taiwanese chipmaker Mediatek.