Ant Group-backed Paytm has a breakthrough in India with nod to put US$6 million into unit

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Paytm has been given the approval to invest 500 million rupees in a its unit Paytm Payment Services, sources said

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A sign of Paytm’s mobile payment technology at a roadside shop in Mumbai on 6 February 2024. Photo: EPA-EFE

Reuters

Published: 5:39pm, 9 Jul 2024

India’s beleaguered Paytm has secured approval from a government panel that oversees investments linked to China to invest 500 million rupees (US$6 million) in a key subsidiary, three sources with direct knowledge of the matter said.

The approval, which still has to be vetted by the finance ministry, will remove the main stumbling block to the unit, Paytm Payment Services, resuming normal business operations.

Paytm Payment Services is one of the biggest remaining parts of the fintech firm’s business, accounting for a quarter of consolidated revenue in the financial year ended March 2023.

A separate unit, Paytm Payments Bank, was wound down this year by order of the central bank due to persistent compliance issues, triggering a meltdown in Paytm’s stock.

A customer paid cash to buy vegetables next to a QR code of Paytm, a digital payments firm, on display at a roadside market in Ahmedabad on February 5, 2024. Photo: Reuters.

The government panel had earlier held back approval due to concerns about the 9.88 per cent stake in Paytm held by China’s Ant Group. India has intensified scrutiny of Chinese businesses since a 2020 border clash between the two countries.