Media reports have claimed that Gautam Adani, Chairman, Adani Group and Vijay Shekhar Sharma, Founder and CEO, Paytm have been in talks for Adani to buy a stake in One 97 Communications, the company that owns Paytm. The reports state that this move is being taken in a bid to come into play against Fintech giants like Google Pay, Amazon Pay and Jio Financial.
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A report on Times of India said that Sharma and Adani had met at Adani Corporate House in Ahmedabad this week to finalise the deal. However, in a filing with the Bombay Stock Exchange, Paytm has categorically denied the report saying it was “speculative”. “With reference to the captioned subject, we hereby clarify that the above mentioned news item is speculative and the Company is not engaged in any discussions in this regard. We have always made and will continue to make disclosures in compliance with our obligations under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Kindly take the same on record,” said the company.
Why Paytm has been in the news of late
One97 Communications, the parent company of Paytm, went public on the Indian stock exchanges on November 18, 2021, following an initial public offering that set a record as the largest in India at that time. During the fiscal year 2022-23, Paytm reported a gross merchandise value (GMV) of Rs 13.2 lakh crore, which is equivalent to US$170 billion.
However, trouble started to brew for the company in March 2022 after allegations were made that customer data was being leaked to China-based entities indirectly holding a stake in Paytm Payments Bank.In addition to this, on 31 January 2024, the Reserve Bank of India (RBI) instructed Paytm Payments Bank to cease most of its operations starting from 29 February 2024, due to insufficient background checks on the sources of funds when onboarding clients. This suspension date was later extended to 15 March 2024, as a result of which the company might have to reduce its workforce by 20%.
Post this development, FASTag – electronic toll collection system in India, operated by the National Highways Authority of India – ended ties with Paytm and stated that FASTags purchased with the Fintech giant were no longer valid.
