A recent exchange filing on Wednesday indicates that the One97 Communications Ltd. has written down the value of its entire investment worth Rs 227 crore in Paytm Payments Bank Ltd.
Why Would This Happen?
It appears that the action by Paytm was prompted by the Reserve Bank of India who had a clampdown on the bank on January 31.
This move has already impacted Paytm’s wallet and banking services.
The financial service provider has also recorded an impairment provision of Rs 227.1 crore.
This way, Paytm is also representing the carrying value of its investment in PPBL.
In the meantime, Paytm’s net loss widened quarter-on-quarter to Rs 551 crore for the fourth quarter of the financial year 2024.
Besides this, the company’s Ebitda loss also stood at Rs 223 crore in comparison to Rs 157 crore in the previous quarter.
Further, the company said that the RBI’s crackdown on payments banks would have a full financial impact in Q1 FY25.
The company reported that the RBI’s crackdown on payments banks would have a full financial impact in Q1 FY25.
When it comes to the revenues, the company expects to generate Rs 1,500 to Rs 1,600 crore in Q1 FY25 revenue.
Discontinuing Various Inter-company Agreements
Paytm is expecting to have an incremental Ebitda impact of Rs 100–150 crore due to the disruptions in operating metrics.
Further, Paytm Payments Bank and OCL,agreed to discontinue various inter-company agreements, after the RBI’s clampdown as per the exchange filing.
Which further indicates that Paytm agreed to discontinue various inter-company agreements on March 1 as it said in an exchange filing.
In the new bank board, it consisted of four new appointments, including Arvind Kumar Jain, independent director and former ED of Punjab and Sind Bank, and Surinder Chawla, managing director and chief executive officer of Paytm Payments Bank.
Out of these, Chawla stepped down on April 9.
In the meantime, the National Payments Corp. of India also granted Paytm a TPAP license for UPI transactions under a multi-bank model.
Notably, Yes Bank became the merchant acquiring bank for the company.
In another development, Paytm founder and CEO Vijay Shekhar Sharma told shareholders in a post-earnings call on Wednesday that the worst is behind the company.
Adding, “We learned a lot of our lessons to become better and resilient. We also resolved to be fully compliant according to the regulator’s expectations in letter and spirit.”
