Why Paytm is setting up subsidiaries in Indonesia and Luxembourg
What's the story
Paytm's parent company, One 97 Communications Ltd, has announced plans to expand its global footprint. The firm's wholly-owned subsidiary, Paytm Cloud Technologies (PCTL), will be setting up two new subsidiaries in Indonesia and Luxembourg. The move is part of Paytm's strategy to enter the payments and financial services sectors in these countries.
Investment details
Paytm to invest ₹25cr in each subsidiary
PCTL has announced plans to invest up to ₹25 crore in each of the two new subsidiaries. The investment will be made at face value and can be done in one or more tranches. Notably, no government or regulatory approvals are required for setting up these entities, according to a recent regulatory filing by Paytm.
Strategic investment
Abbar Global SPV to invest in Paytm's UAE unit
Separately, Paytm Arab Payments L.L.C. (PAPL), a subsidiary of PCTL, has approved a strategic investment by Abbar Global Opportunities Holdings Ltd (AGOHL). The move is subject to required approvals and conditions. As part of the deal, PAPL will issue and allot 76,862 equity shares with a face value of AED 100 each to AGOHL. This will give AGOHL a 49% stake in PAPL's post-issue paid-up share capital.
Ownership change
Paytm's UAE unit to become 51%-owned subsidiary
The strategic investment by AGOHL is worth around AED 7.69 million and is tipped to be completed by February 28, 2026. After the transaction, PAPL will no longer be a wholly-owned subsidiary of PCTL but will become a 51%-owned subsidiary. However, it will continue to operate as a step-down subsidiary of One97 Communications.