One97 Communications-owned Paytm, has reportedly pledged all its current assets and mutual fund investments to ICICI Bank Ltd in order to borrow INR 1,400 Cr. ($196 Mn) for its working capital needs.
Last Month, Paytm and ICICI Bank Ltd signed an agreement according to which One97 Communications’ pledged its current assets worth a total of INR 7,085.1 Cr. (as on 31 March 2018) to the bank in order to increase the startup’s borrowing capacity. Until now, Paytm had the borrowing capacity upto INR 400 Cr.
Amid present cash crunch conditions in the market, this increase in borrowing limit will help Paytm in securing capital for its everyday operations. The agreement was formally registered with the corporate affairs department on Wednesday, as reported by Mint.
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“One97 Communications has clear goals. Several attractive deals are on the table and even if there is a difficulty to get an equity buyer due to the cost of stake in a large-scale startup such as One97, the company’s plans should not suffer due to shortage of working capital limits,” a person close to the development told Mint.
Company’s CEO Vijay Shekhar Sharma recently announced company’s goal to grow 50% to double the GMV to $2 Bn by the fiscal year ending March 2019. Also, Paytm recorded 221 Mn transactions in January 2019.
Last month, Noida-based company acquired last-minute hotel booking app, NightStay to strengthen its travel business. Commenting on the acquisition, Paytm chief financial officer Madhur Deora said, “We want to offer the broadest travel selection on our platform, and look forward to continuing our expansion with the help of our trusted travel partners,”
In FY18, Paytm recorded sale of 38 Mn travel tickets on its platform. Paytm is aiming at 2X growth in ticketing volumes by end of FY19, with a target of becoming a dominant player in the online travel booking space.
After company’s foray into Canada and Japan, it is reportedly considering expanding its digital payments services into one-two more developed markets in 2019, according to Deora.
In August 2018, Warren Buffet’s Berkshire Hathaway Inc had also bought $356 Mn (INR 25 Bn) stake in Paytm’s parent company One97. China’s Alibaba Group and its financial services arm Ant Financial Services Group has also invested in the company.