Not In Negotiations To Acquire Paytm’s Wallet Business: Jio Financial Services

Jio Financial Services (JFS) on Monday (February 5) dismissed a report which said the company was in talks to acquire the wallet business of Paytm following the Reserve Bank of India’s (RBI’s) crackdown on Paytm Payments Bank.

In a clarification sent to the bourses, JFS termed the report speculative and said it was not involved in any such negotiations.

“With reference to the captioned subject, we clarify that the news item is speculative and we have not been in any negotiations in this regard. We have always made and will continue to make disclosures in compliance with our obligations under the SEBI… Regulations, 2015,” said JFS in a regulatory filing. 

This is in line with what Paytm said earlier on Monday (February 5). The fintech giant also termed the report a speculation. A source at the company told Inc42 that the company was not involved in talks to sell the wallet business.

Earlier, a report by Hindu businessline said that JFS and HDFC Bank were the frontrunners to acquire Paytm’s wallet business. 

According to the report, multiple executives said that they were aware of talks that involved Jio Financial and Paytm for a potential deal since at least November last year. 

“With KYC related issues compounding for Paytm, they’ve not been as aggressive with the business as they were prior to 2022 in the wallets business and if valuations on the table were decent, the talks with Jio would have fructified much earlier,” a source reportedly said. 

Afterwards, the stock exchanges sought clarification from both JFS and Paytm on the matter. 

The report sent the stock of JFS soaring, which surged as much as 16.5% during the intraday trading on the BSE on February 5. 

Paytm Payments Bank was thrusted in uncharted waters last week after the RBI barred it from taking any user deposits and offering any other banking services, such as UPI facility and fund transfers, post February 29, 2024.

The aftermath saw Paytm issuing multiple statements to assuage jumpy investors and customers that it would continue to operate post the deadline. The company also said that it was working with the central bank to comply with the regulatory requirements and find a way out. 

Meanwhile, founder and CEO Vijay Shekhar Sharma assured employees over the weekend that there would be no layoffs at the company. 

Amid these, the Confederation of All India Traders (CAIT) asked all its member businesses and traders to switch from Paytm to other payment platforms for business-related transactions.

As if this was not enough, revenue secretary Sanjay Malhotra said that while there was no probe underway against Paytm currently, law enforcement agencies would investigate the fintech major if needed.

Meanwhile, Paytm stock hit the lower circuit for the third consecutive trading session on Monday even as both the BSE and the NSE lowered Paytm’s circuit limits to 10% from 20% earlier. Shares of the company closed 10% lower at INR 438.35 on the BSE on Monday.