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Digital payments and financial company Paytm is looking to hive off its payment aggregator business into a new subsidiary Paytm Payments Services Limited, according to a notice sent to shareholders for approval.
The company is seeking approval of the same from its shareholders through an extraordinary general meeting on September 23.
"To consider and approve transfer of Payment Aggregator business to Paytm Payments Services Limited, a wholly owned subsidiary of the Company, to comply with Reserve Bank of India guidelines, being considered as sale of undertaking," the EGM notice issued on August 31 said.
The new entity will include Paytm's online payment gateway business.
RBI guidelines for regulation of payment aggregators (PAs) requires their business to be regulated and run by a separate company, after obtaining the license from RBI.
Indicative book value of the new entity is in the range of Rs 275-350 crore which will be paid to the parent firm One9 Communications (OCL) in five equal annual installments.
The actual consideration will be the derived basis book value appearing as of August 31, 2021.
OCL's Paytm provides digital and payment services to 33.3 crore consumers and over 2.1 crore merchants, as on March 31, 2021.
The company has reported gross merchandise value of over Rs 4 lakh crore for the financial year 2020-21.
The company is likely to launch its Rs 16,600 crore-IPO in October for which it has already filed draft papers with SEBI.
Photograph: Shailesh Andrade/Reuters