Paytm is to convene an EGM on 23 Sept to seek shareholder approval for setting up Paytm Payments Services that will house its online payment aggregator and payment gateway business
In a fresh notice to shareholders on Tuesday evening, One97 Communications Ltd,the parent entity which owns brand Paytm, said that it will be shifting its payment aggregator business to a new subsidiary, Paytm Payments Services Ltd.
The company is to convene an extraordinary general meeting (EGM) on 23 September to seek shareholder approval for setting up Paytm Payments Services Ltd that will house its online payment aggregator and payment gateway business.
In the letter to shareholders, One97 Communications said the transfer of its payments business will be made on a slump sale basis for a lump sum of ₹275-350 crore, which it will receive in five equated annual instalments.
The actual consideration will be the derived based on the book value appearing as of 31 August 2021, it said.
In March 2020, the Reserve Bank of India (RBI) issued new guidelines for payment aggregators and payment gateways, in a bid to further regulate the sector. The guidelines stated that non-banking entities offering payment aggregator services need to apply for fresh authorization.
The guidelines also stated that the non-banking entities will have to separate their payment aggregator and gateway businesses from their marketplace business.
Paytm applied for fresh authorization for its payment aggregator and gateway business last December, said a person aware of the matter on the condition of anonymity.
Meanwhile, Paytm is also slated to hold an EGM on Thursday to discuss expanding its employee stock ownership plan (ESOP) pool.
The company was looking to alter One97 Communications’ Employee Stock Option Scheme 2019 by more than doubling its existing ESOP pool from 24,094,280 equity options to 61,094,280 equity options at a face value of ₹1 each.
In July, Paytm also sought the market regulator Securities and Exchange Board of India’s approval for its ₹16,600 crore initial share sale, which is touted to be one of the country’s biggest initial public offerings (IPOs).
As part of the IPO, India’s second-most valuable startup will sell new shares worth ₹8,300 crore, Paytm said in its draft share sale prospectus. Existing shareholders will sell stocks worth another ₹8,300 crore through the IPO.
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