Digital payments and financial services company Paytm has said that it will seek a new general insurance license with a fresh application, aimed at gaining majority shareholding with a 74 percent upfront equity stake.
In a regulatory filing, Paytm reiterated its intention to make inroads in the general insurance sector, as it is extremely bullish about its potential. Paytm said it remains bullish on its roadmap for general insurance, “and we intend to seek requisite approvals for a new general insurance license, wherein we hold a 74 percent majority shareholding upfront.”
Paytm is synonymous with digital payments in India – having pioneered QR code and wallet trends in the country. It has also successfully forayed into financial services as its partner-based lending business has recorded rapid growth.
This, along with the growing technology-led insurance penetration in India, now gives the company confidence to file for a new application, where One 97 Communications Ltd – the parent firm of Paytm – will have a direct majority shareholding instead of the earlier proposed fully-diluted shareholding of 11 per cent.
The decision to seek approval for a new license comes after Paytm and Raheja QBE mutually agreed to discontinue the proposed acquisition of RQBE.
The company in the exchange filing said, “Our associate company, Paytm Insuretech Private Limited, had entered into a share purchase agreement to acquire 100 per cent of Raheja QBE General Insurance Company Limited. As the share sale and purchase transaction has not been consummated within the time period envisaged by the parties under the said agreement, the agreement has automatically terminated.”
In a separate filing on Sunday, Paytm shared its business operating update for the month of April. Paytm’s lending business now has an annualized run rate of Rs 20,000 crore.
In April alone, the company disbursed 2.6 million loans through its platform worth Rs 1,657 crore (USD 221 million). The company also recorded over 100 per cent year-on-year growth in total merchant payments volume or GMV, aggregating to Rs 0.95 lakh crore (USD 12.7 billion).
Paytm’s monthly transacting users stood at 73.5 million. In the offline payments segment, the company’s total device deployment across India has crossed 3 million.