Paytm said that the deal has been automatically terminated because it was not consummated within the time period in the agreement
The deal was first announced in July 2020 when Paytm acquired a 100% stake in the Mumbai-based private sector general insurer for INR 568 Cr
Paytm also had acquired a brokerage licence to enter the insurance sector more directly
Fintech giant Paytm has said that its 2020 acquisition of insurance company Raheja QBE has been terminated in a regulatory filing.
In the filing with BSE, the company said, “As the share sale and purchase transaction has not been consummated within the time period envisaged by the parties under the said agreement, the agreement has automatically terminated.”
Further, Paytm reiterated its intention to remain bullish in general insurance, stating that it will work to acquire a new licence to continue.
“Paytm remains bullish on its roadmap for general insurance, and we intend to seek requisite approvals for a new general insurance license, wherein we hold a 74% majority shareholding upfront,” the regulatory filing read.
The deal was first announced in July 2020 when Paytm acquired a 100% stake in Mumbai-based private sector general insurer Raheja QBE for INR 568 Cr. Raheja QBE was owned 51% by Prism Johnson and 49% by QBE Australia.
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At the time of the acquisition of Raheja QBE, Paytm had said, “It is an important milestone in Paytm’s financial services journey, and we are very excited to welcome Raheja QBE General Insurance into the Paytm family.”
In 2018, Paytm had also incorporated two insurance companies — Paytm Life Insurance Corporation Ltd and Paytm General Insurance Corporation Ltd. The two companies were in direct competition with Bajaj Allianz, Aviva, United, HDFC, LIC, Future Generali and others.
In 2020 itself, Paytm gave up its corporate agency licence in exchange for a brokerage licence to enter the insurance sector more directly than before.
Paytm posted revenue of INR 1,456 Cr from operations in the quarter ending in December 2021, i.e. Q3 FY22. This is almost a 34% rise from INR 1,086 Cr the company earned during July – September of 2021 and an 88.6% rise from INR 772 Cr it clocked during the same period in FY21.
The company’s loss during Q3 of FY22 was pegged at INR 778.5 Cr, a 64% increase from INR 473.5 Cr it recorded in Q2 of FY22. This is also a 47% rise from INR 535.5 Cr it saw in Q3 of FY21. In the nine-month of FY22 which started from April 2021, the fintech giant’s loss after tax stood at INR 1,633.9 Cr.
Paytm was listed in November 2021 in India’s largest tech IPO to date. However, since then, it has seen its market capitalisation reduce to a third of its peak market value at the time of the IPO.