SEBI had issued a show cause notice to PayTM on the ESOP issued to him. File
| Photo Credit: Reuters

Market regulator Securities Exchange Board of India (SEBI) has issued notice to fintech firm One97 Communications, which owns the PayTM brand, in the March 2024 quarter on employee stock options given to its MD and CEO Vijay Shekhar Sharma, according to the company filing on Monday (August 26, 2024).

In response to a query from stock exchanges, PayTM said the notice is not a new development, and it is in regulatory contact with the market regulator to make required representations.

According to PayTM’s financial year 2024 annual result filing, it had issued 2.1 crore employee stock options (ESOP) to Mr. Sharma in the financial year 2022.

SEBI had issued a show cause notice to PayTM on the ESOP issued to him.

“This is not a new development, as the company had already made relevant disclosures on this matter in its financial results for the quarter and year ended March 31, 2024, as well as the quarter ended June 30, 2024. The company is in regular communication with the SEBI and making necessary representations regarding this matter,” PayTM said in response to a stock exchange query.

The disclosure made on May 22 and July 19 said that PayTM has submitted its preliminary response and is in the process of seeking further information from the regulator in this regard.

“Based on an independent legal opinion obtained by the management, it believes that the Company is compliant with the relevant regulations. Accordingly, there is no impact on the financial results for the year ended March 31, 2024,” the filing said.

Paytm’s shares closed at ₹467.25 apiece on July 12, 2024. File
| Photo Credit: REUTERS

Japan’s Softbank investment arm Softbank Vision Fund exited from Paytm in the June quarter at a loss of around $150 million, sources aware of the development said.

Softbank invested about $1.5 billion in One97 Communications, the owner of Paytm brand, in tranches in 2017. “Softbank has exited Paytm at a loss of 10-12%. The total loss is around $150 million,” one of the sources said.

Softbank held around 18.5% stake in Paytm before the company’s initial public offering (IPO) in 2021. It held a 17.3% stake through SVF India Holdings (Cayman) Ltd and 1.2% through SVF Panther (Cayman) Ltd.

SVF Panther sold its entire stake during the IPO for ₹1,689 crore, about $225 million.

“Softbank announced that it will exit Paytm in 24 months from the time of the IPO. The exit was in line with Softbank’s plan. However, the company did anticipate loss at that time,” another source said.

Softbank had acquired Paytm shares at an average price of about ₹800 apiece.

Paytm share price was listed at ₹1,955, lower by 9%, and has not matched its issue price of ₹2,150 apiece to date.

The share price of Paytm plummeted further after the Reserve Bank of India (RBI) banned its associate firm Paytm Payments Bank Ltd (PPBL) from carrying out transactions. It touched an all-time low of Rs 310 on May 9.

Paytm reported widening of losses to ₹550 crore in the fourth quarter of 2023-24 following the ban on transactions related to its payments bank.

The company during the reported quarter wrote off ₹227 crore investment for a 39% stake in PPBL following future uncertainties associated with its business operations, including the uncertainty of any other regulatory development, etc.

For the year ended March 31, 2024, the company’s loss narrowed to ₹1,422.4 crore. Paytm had recorded a loss of ₹1,776.5 crore in FY23.

Billionaire Warren Buffet’s Berkshire Hathaway Inc also exited Paytm around seven months back by selling shares at a lower-than-acquired price.

The company had acquired 2.6% stake in Paytm for ₹1,279.7 per share at an aggregate value of ₹2,179 crore, as per an official document.

The shares were disposed of at an average price of ₹877.29 apiece, taking the transaction value to ₹1,370.63 crore in November. Paytm’s shares closed at ₹467.25 apiece on Friday.

Paytm is in talks with Zomato to sell its movie and events ticketing business, according to people familiar with the matter, as the beleaguered fintech company carves a revival strategy amid weakening sales.

The discussions between Paytm, officially known as One97 Communications Ltd, and online food delivery firm Zomato are in advanced stages, though there are other suitors for the business, the people said, declining to be named as the matter is private. Talks are ongoing and no final decision has been made, the people said.

Paytm, run by billionaire founder-CEO Vijay Shekhar Sharma, last month reported its first sales decline on record and vowed to trim non-core assets. It also warned of job cuts, reflecting the fallout from regulatory action on Paytm Payments Bank Ltd. that’s curtailed much of the fintech’s business and forced it to forge new partnerships with lenders.

Paytm does not control the bank but relied on it for digital wallets and payments traffic before the central bank’s move earlier this year.

Paytm and Zomato did not respond to requests for comment outside of regular business hours.

Paytm does not disclose standalone numbers for its movie and events ticketing business. It reported annual sales of 17.4 billion rupees ($208 million) in the fiscal year through March 2024 in its marketing services business, which includes movie and events as well as credit card marketing and gift vouchers.

The sale, if successful, will allow Paytm to sharpen its focus on travel, deals, and cash backs – businesses that are important to broaden its merchant base and grow its own sales.

The purchase could help Zomato expand its digital business into a new high-growth area. In 2020, it acquired Uber Technologies Inc.’s India food unit.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

The logo of the Paytm app. File
| Photo Credit: Reuters

Fintech firm One97 Communications, owner of the Paytm brand, is laying off an undisclosed number of employees and claimed that it is providing outplacement support for their smooth transition, according to a company statement.

Paytm’s sales employee headcount in the March 2024 quarter dropped by about 3,500 to 36,521 personnel on a quarter-on-quarter basis, mainly due to the impact of the Reserve Bank of India’s (RBI) ban on services of Paytm Payments Bank.

“One97 Communications Limited (OCL) is providing outplacement support to employees who have resigned as a part of the restructuring efforts by the company. The company’s human resource teams are actively collaborating with over 30 companies that are currently hiring, and providing assistance to employees who have opted to share their information, facilitating their immediate outplacement,” the company said on June 10.

Paytm did not disclose the number of employees impacted by the restructuring. “Paytm is also disbursing bonuses which were due to employees, ensuring fairness and transparency in the process,” the statement said.

Paytm has reported a widening loss to ₹550 crore in January-March 2024, after the baned transactions related to its payments bank.

The RBI had barred Paytm Payments Bank Limited (PPBL) from accepting deposits, credit transactions or top-ups in any customer accounts, wallets, and FASTags, keeping in view the interest of customers, including merchants from March 15 onwards.

The company had posted a loss of ₹167.5 crore in the same period a year ago. “As part of its FY24 earnings release, One97 Communications stated that it will be pruning its non-core business lines, and will continue its efforts to maintain a leaner organisation structure through AI-led interventions. The company has been actively working towards driving profitability, in line with its guidance,” the statement said.

Image for representational purposes only.
| Photo Credit: REUTERS

Fintech firm One97 Communications, which owns the Paytm brand, on May 22 said its loss in the fourth quarter of the financial year 2023-24 has widened to ₹550 crore.

The company had posted a loss of ₹167.5 crore in the same period a year ago, the company said in a regulatory filing.

The revenue from operations of Paytm declined 2.8% to ₹2,267.1 crore during the reported quarter, from ₹2,464.6 crore in the corresponding quarter of the financial year 2023.

For the year ended March 31, 2024, the company’s loss narrowed to ₹1,422.4 crore. Paytm had recorded a loss of ₹1,776.5 crore in FY23.

The annual revenue of Paytm increased by about 25% to ₹9,978 crore for FY24, from ₹7,990.3 crore in FY23.

The Reserve Bank of India (RBI) barred Paytm Payments Bank Limited (PPBL) from accepting deposits, credit transactions or top-ups in any customer accounts, wallets, and FASTags, keeping in view the interest of customers, including merchants from March 15 onwards.

Paytm had estimated a ₹300-500 crore loss due to the RBI’s restriction on PPBL.

New Delhi:

Digital payments firm Paytm posted a wider loss in the fiscal fourth quarter on Wednesday, hurt by weakness in its payments and financial services business after the central bank shut down its banking unit.

The company’s consolidated net loss was at Rs 5.5 billion as it took an impairment of Rs 2.27 billion towards scaling down the business of Paytm Payments Bank.

Paytm had reported a loss of Rs 1.68 billion a year ago in the March-quarter.

Meanwhile, its consolidated revenue from operations fell to Rs 22.67 billion ($272.3 million) for the January-March quarter from Rs 23.35 billion a year earlier.

The Reserve Bank of India had ordered Paytm Payments Bank, an associate of Paytm, to stop accepting fresh deposits in its accounts or digital wallets from March, raising concerns about revenue from the company’s main payments business.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)