Paytm has invested $500 million rupees in a key subsidiary after getting approval from the government, a top finance minister told Reuters.
With this approval, Paytm Payments Bank can resume its normal business operations as the company was stuck for months due to its link with China.
Reportedly, the government had given the nod for the investment earlier this month.
Vivek Joshi, the finance secretary, started that the company can approach RBI to seek a payment aggregator license which the central bank would evaluate.
This development made the shares of One97 Communications, the parent entity of Paytm, surge to Rs 509.05 from its previous day close of Rs 462.80 a piece, making an increase of 10%.
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Recently, the fintech platform was imposed a penalty totaling Rs 250 for non-payment of stamp duty amounting to Rs 199 by the Collector of Stamps, New Delhi. This penalty is in relation to the allotment of 3,828 equity share related to the exercise of stock option under the Employee Stock Options Scheme 2008.
Despite being penalized, the company stated that it would not have an effect on its financial performance.
Paytm Payments Services is the biggest remaining part of the fintech firm's business, accounting for a quarter of a consolidated revenue in the financial year that ended in March 2023.
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It released its Q1 results where it reported that its loss had widened to Rs 840 crore. Similarly, its revenue decreased from Rs 2,342 crore in Q1 of FY24 to Rs 1,502 crore.
Earlier this year, after failing to comply with the RBI’s regulations, the central bank barred the Paytm Payments Bank Limited (PPBL), the fintech’s banking arm, from accepting deposits, credit transactions, or top-ups in any customer accounts, wallets, or FASTags, keeping in view the interests of customers, including merchants, from March 15.
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