Paytm mortgage to founder seemingly for insurance coverage enterprise

IPO-bound One97 Communications Ltd, father or mother firm of funds agency Paytm, will search shareholders’ nod later this month to increase a mortgage as much as Rs 743 crore to 2 holding firms owned by founder and CEO Vijay Shekhar Sharma. As per sources, the quantity raised is probably going for use for funding in Paytm’s insurance coverage enterprise.
According to a discover of the corporate’s annual normal assembly to be held on June 30, in lieu of the funding, One97 Communications will probably be issued optionally convertible debentures by VSS Holdings Pvt Ltd price as much as Rs 491.93 crore, and inter-corporate deposits (ICDs) price as much as Rs 250.79 crore by VSS Investco Pvt Ltd. The ICDs could be issued in a number of tranches. It is learnt that the Alibaba-backed firm’s board of administrators has cleared the choice. Paytm didn’t reply to queries despatched by The Indian Express.
Last yr, a wholly-owned subsidiary of the corporate, Paytm Insurance Broking Pvt Ltd, acquired its license to promote life and non-life insurance coverage from Irdai.
The father or mother firm additionally lately authorized a Rs 90-crore funding in Paytm Insurance Broking Pvt Ltd, at the same time as One97 Communications itself noticed its enterprise shrink because of Covid.
For FY21, One97 Communications noticed its income from operations fall 14.5 per cent over the earlier yr to Rs 2,802 crore, at the same time as its internet loss narrowed to Rs 1,701 crore, in comparison with Rs 2,942 crore in FY20. One97 Communications has additionally proposed to retain Sharma’s remuneration at Rs 4 crore every year for the continued fiscal.

In a separate letter to its shareholders Monday, the corporate knowledgeable them of its plan to undertake an IPO. It has invited purposes from its shareholders that wish to dilute their stakes within the IPO. “Whilst the board of directors have provided an in-principle approval for the IPO, the size of the offer for sale component is subject to final approval of the board of directors,” it stated.