Paytm Payments Services Limited (PPSL) has received an extension from the Reserve Bank of India (RBI) to resubmit its application for the payment aggregator license, One 97 Communications, the parent of Paytm, said in a regulatory filing on Sunday. The company can, however, continue with its online payment aggregation business. The apex bank has also asked the digital payments firm to take necessary approval for past downward investments from Paytm into PPSL to comply with the foreign direct investment (FDI) norms and not to onboard new online merchants.
"As per RBI's letter, on receipt of approval from GoI, PPSL will have fifteen days to submit the application seeking authorisation for PPSL to operate as an online PA. However, if any adverse decision is taken by the GoI, then the same shall be informed to RBI immediately. During this process, PPSL can continue with its online payment aggregation business for existing partners, without onboarding any new merchants," the company said in a statement.
The company said that this will have “no material impact” on business and revenues since the company continues to provide services to its existing online merchants. "Furthermore, for offline business, OCL can continue to onboard new merchants and offer them payment services including All-in-One QR, Soundbox, Card Machines, etc," the company said.
On November 26, the apex bank asked One 97 Communications to re-submit its payment aggregator (PA) application within 120 calendar days.
Following the development, shares of One 97 Communications surged 2.02% to hit an intra-day high of ₹631.85 apiece on the Bombay Stock Exchange on Monday. During the session, the shares of One 97 Communications opened higher at ₹621.20 as against the closing price of the previous session at ₹619.30 on the BSE. During the session, the market capitalisation of the company stood at ₹11,483 crore with as many as 69,604 shares exchanging hands on the BSE against the two-week average of 3.36 lakh shares.
Last month, Jack Ma-led Alibaba offloaded 21.43 million shares of Paytm at ₹642.74 apiece to investors, including Morgan Stanley. Alibaba, which held a 6.26% direct stake in Paytm as of December 2022, sold a partial 3.1% shares in the company in January.
During the quarter ended December 31, 2022, the company’s net loss narrowed to ₹392 crore as compared to the loss of ₹779 crore in the same period a year ago. The revenue from operations rose 42% year-on-year (YoY) to ₹2,062 crore, driven by an increase in merchant subscription revenues, growth in loan distribution and momentum in the commerce business.