Paytm simplifies group structure, transfers offline merchant payments to PPSL in internal rejig

Paytm founder Vijay Shekhar Sharma

Paytm’s parent company, One 97 Communications, has announced an internal restructuring to simplify its corporate structure by bringing key subsidiaries under direct ownership, according to a company filing shared on October 15.

The fintech company has also transferred its offline merchant payments business to Paytm Payments Services (PPSL), a wholly owned subsidiary, in-line with the Reserve Bank of India’s (RBI) regulatory requirements, the statement said.

The board of One 97 Communications approved several intra-group transactions on October 15 to consolidate financial and technology entities under direct ownership. As part of the plan, One 97 will acquire around 51.22 percent equity in Paytm Financial Services from founder Vijay Shekhar Sharma and his entity VSS Investco for up to Rs 0.5 crore at fair value. Following this transaction, Paytm Financial Services will become a wholly owned subsidiary.

Other subsidiaries, including Admirable Software, Mobiquest Mobile Technologies, Urja Money, and Fincollect Services will also become wholly owned subsidiaries through direct or indirect ownership. The company plans to transfer shareholdings of these entities directly under One 97 Communications through intra-group transactions. These entities are engaged in technology, loyalty and collection services.

In FY25, Admirable Software reported total income of Rs 0.44 crore, Mobiquest Rs 33.43 crore, Urja Money Rs 18.59 crore, and Fincollect Rs 220.47 crore.

Additionally, Paytm will acquire remaining stakes in Paytm Emerging Tech (formerly Paytm General Insurance), Paytm Insuretech and Paytm Life Insurance from Vijay Shekhar Sharma and his entities for up to Rs 3.52 crore, based on net asset value. All three entities will become wholly owned subsidiaries after the acquisition.

The company will also increase its stake in Little Internet Pvt Ltd from 62.53 percent to about 78 percent through the conversion of optionally convertible debentures and inter-corporate deposits worth approximately Rs 15 crore at face value.

Paytm said all related-party transactions have been independently valued and undertaken at arm’s length in compliance with Sebi’s guidelines and added that the restructuring will simplify ownership and strengthen governance, along with adding greater agility.

Transfer of offline merchant payments business

In a separate announcement, the firm transferred its offline merchant payments business to Paytm Payments Services to comply with RBI’s directions issued on September 15, 2025. The transfer, to be executed through a slump sale on a going concern basis, will consolidate both online and offline merchant payment operations under PPSL, which has received in-principle approval from the RBI to operate as a payment aggregator.

The business being transferred includes merchant services offered through QR codes, Soundbox, and EDC machines. The transaction will be carried out at book value and will have no impact on consolidated financials, as PPSL is a wholly owned subsidiary.

For FY25, the Offline Merchant Payments Business reported revenue of approximately Rs 2,580 crore, accounting for about 47 percent of Paytm’s standalone revenue, with a net worth of Rs 960 crore, or 7.45 percent of the company’s standalone net worth, the firm said in a statement.

The transfer is expected to be completed by December 31, 2025, subject to shareholder and board approvals, and will be executed through a Business Transfer Agreement between the parent company and PPSL.

The company clarified that the transaction does not form part of any scheme of arrangement and aims to align operations within a single regulated entity for efficiency and compliance.