Paytm Sets Up Two New Overseas Units, Raises Funds For UAE Unit

Adding to its overseas push, listed fintech major Paytm has announced that it is setting up new subsidiaries in Indonesia and Luxembourg as well as bringing onboard a new investor to its UAE payments arm

In a stock exchange filing today, Paytm said its cloud arm, Paytm Cloud Technologies Ltd (PCTL), has approved the setup of two wholly owned subsidiaries, one in Indonesia and another in Luxembourg. 

These overseas units will focus on exporting Paytm’s payments and financial services technology to international markets.

Paytm plans to invest up to INR 25 Cr in each of the two subsidiaries. 

As part of this restructuring, Paytm transferred its entire offline merchant payments business to PPSL in November, with a book value of INR 960 Cr for FY25. The company said the move was aimed at regulatory compliance and operational efficiency.

Separately, Paytm also announced a change in ownership at Paytm Arab Payments LLC, its UAE-based payments company. As per filings, Abbar Global Opportunities Holdings Ltd, an investment vehicle linked to UAE billionaire Mohamed Alabbar, will acquire a 49% stake in the unit.

Under the transaction, Paytm Arab Payments will issue 76,862 new shares to the Alabbar-backed entity at a face value of AED 100 (around INR 2,438) per share. This will bring in an investment of approximately AED 7.69 Mn (about INR 18.7 Cr). Post the deal,  Paytm Arab Payments will become a step down subsidiary of Paytm, with the latter only retaining 51% controlling stake in the UAE business.

Paytm said the UAE transaction is expected to close by February 28, 2026, subject to regulatory approvals. Mohamed Alabbar is best known as the founder of Emaar Properties, the real estate giant behind projects such as Burj Khalifa and Dubai Mall. He is also a cofounder of ecommerce platform Noon.

The UAE partnership and new overseas subsidiaries align with Paytm’s broader international strategy. In its FY25 annual report, the company said it expects international expansion efforts to start delivering results over the next three years, driven by its tech-led merchant payments and financial services model.

Paytm is currently testing cross-border use cases. In October, it rolled out UPI access for NRIs in 12 countries, allowing users to make UPI payments in India using international mobile numbers linked to NRE or NRO accounts. The company had also launched UPI International in select overseas markets in late 2024.

On the domestic front, Paytm is currently focussed on rebuilding its bread and butter consumer payments business following the RBI crackdown on Paytm Payments Bank in 2024, which left the company without its in-house banking rails and forced it to rely on third-party payment aggregators.

To address this, Paytm has spent the past year consolidating and strengthening its payments infrastructure under its payments subsidiary, Paytm Payments Services Ltd (PPSL).

Earlier this month, PPSL received three key payment aggregator licences from the RBI, allowing it to operate across online, offline, and cross-border transactions, both inward and outward. With this approval, PPSL now holds payment aggregator licences across all major segments, enabling it to deploy and manage PoS devices and soundboxes for merchants in India and abroad.

Paytm has also pumped fresh capital into PPSL to support this expansion. On December 12, the company completed an additional investment of INR 2,250 Cr into the subsidiary via a rights issue to strengthen its net worth, support working capital needs, and build leadership in merchant payments.

During its Q2 earnings call, founder and CEO Vijay Shekhar Sharma said the company would continue to double down on payments to sustain profitability.

In Q2 FY26, Paytm’s payment processing margin revenue rose 27% YoY to INR 594 Cr, while merchant subscription volumes increased to 1.37 Cr. The segment now contributes more than half of Paytm’s operating revenue.

Paytm reported a net profit of INR 21 Cr in Q2 FY26, compared to INR 930 Cr in the year-ago quarter, though the bottom line in the quarter under review was impacted by a one-time impairment loss related to its now-shut real money gaming venture.

Shares of Paytm ended today’s trading session 0.59% lower at INR 1,328.85 on the BSE.