Paytm expands financial services play, buys Raheja QBE General Insurance
Digital payments platform Paytm is set to expand into insurance, with the acquisition of Mumbai-based Raheja QBE General Insurance.
Currently, Prism Johnson holds 51 per cent stake in Raheja QBE, while the remaining 49 per cent stake is owned by QBE Australia.
This acquisition, estimated to be close to Rs 570 crore, is being done through QorQ1, a technology company, in which Paytm’s founder and CEO Vijay Shekhar Sharma holds a majority stake and the rest is held by Paytm.
The company is currently in the process of fulfilling customary conditions, including approval from the insurance regulator IRDAI, it said.
Paytm launched in 2010 as a prepaid DTH and mobile phone recharge platform. Over the period, it has expanded beyond just payments, launching the mobile wallet in 2014 and a payments bank in 2017. A consumer shopping app Paytm Mall was also launched in the same year. In 2018, Paytm launched a dedicated platform for mutual fund investments.
Paytm, which is backed by China’s internet giant Alibaba, says insurance is a part of its journey to drive financial inclusion and it will help it reach out to millions of users, merchant partners and other stakeholders with innovative products.
In 2017, Paytm’s parent company One97 Communications had entered the corporate agency business to sell policies of several insurance companies. Earlier this year, it surrendered the corporate agency licence to acquire an insurance broking licence and had tied up with over 20 insurance firms. The acquisition of Raheja QBE will allow Paytm to market and sell its own insurance products.
“It is an important milestone in Paytm’s financial services journey. Its (Raheja QBE) strong management team will help us accelerate our journey of taking insurance to the large population of India with the aim to create a tech-driven, multi-channel general insurance company with innovative and affordable insurance products,” said Amit Nayyar, president of Paytm.
For India’s Prism Johnson, selling the entire 51 per cent stake in Raheja QBE is a part of its plan to focus on its core areas.
“Our decision to sell our stake in Raheja QBE is in line with our mission to create sustainable shareholder value and will enable us to focus our resources on our core businesses,” said Vijay Aggarwal, MD of Prism Johnson.
Paytm was the early mover in digital payments space, but has to yet report a profit amid stiff competition off-late from newer players like PhonePe and GooglePay.
Paytm Payment’s bank though has been profitable for the last two years; it reported a net profit of close to Rs 30 crore in the financial year 2019-2020.
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