The remaining stake will be held by founder Vijay Shekhar Sharma-owned VSS Holdings Pvt Ltd.
Currently, One97 Communications owns 49% of the equity share capital in
General, while the rest is with VSS Holdings. Following the investment, Paytm General will become a subsidiary of One97 Communications.
One97 Communications will support Paytm general insurance licence application with an investment of up to Rs 950 crore in tranches over a period of 10 years, the company said in a filing to the BSE on Saturday.
“Our decision to seek a new licence organically is consistent with our focus on capital efficiency and reflects our confidence in scaling digital financial services. We believe that an upfront, majority equity stake of 74%, is the right foundation for creating value for our shareholders,” a Paytm spokesperson said in a statement.
Last week, Paytm had
called off its two-year-long bid to acquire Raheja QBE General Insurance.
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In a separate filing to the stock exchange on Saturday, Paytm said it had reappointed Sharma as managing director and chief executive officer for five years starting December 19, 2022.
Madhur Deora, the company’s group chief financial officer and president, has been appointed to its board as a whole-time director for the next five years.
On Friday, Paytm
reported a consolidated loss of Rs 2,396.4 crore for fiscal year 2022, about 41% wider than the previous year’s loss of Rs 1,701 crore.
Consolidated revenue for the year ended March 31 grew 65% to Rs 5,264.3 crore from Rs 3,186.8 crore in FY21, as per filings made to stock exchanges on Friday.
For the fiscal fourth quarter ended March 31, 2022, its consolidated loss widened to Rs 762.5 crore from Rs 444.4 crore a year earlier.
Revenue during the same period rose 81% to Rs 1,648.4 crore, driven by growth in gross merchandise value processed from its payment instruments, as well as an increase in loan disbursals.