
Paytm, a popular digital payment platform, is considering selling its wallet business. The potential buyers include HDFC Bank and Jio Financial Services (JFSL), according to a report by Hindu Businessline (BL).
Paytm’s Wallet Business and Recent Developments
Paytm’s wallet business is part of Paytm Payments Bank. Recently, the Reserve Bank of India (RBI) prohibited Paytm Payments Bank from accepting deposits starting from February 29. Talks between Paytm and JFSL have been ongoing since November of the previous year.
Challenges Faced by Paytm
Due to Know Your Customer (KYC)-related issues, Paytm has faced challenges, leading to a less aggressive approach to its wallet business since 2022. Talks with Jio have been delayed, and the report suggests that favorable valuations could have expedited the process.
Seeking Continuity Through a Deal
With the challenges at hand, Paytm is actively seeking a deal to ensure the continuity of its wallet business.
Engagements with Potential Buyers
Paytm has approached HDFC Bank for a deal just before the RBI ban. HDFC Bank’s digital wallet, Payzapp, boasts around 14 million users. This potential deal could provide JFSL with a significant entry into the industry.
Market Reactions
Following the reports, Jio Financial Services Ltd’s shares experienced a notable increase of 15.74% on the Indian stock market, trading at Rs 293.7 apiece. In contrast, HDFC Bank’s shares remained flat at Rs 1,446.25 apiece, and Paytm’s shares saw a significant decline of over 40% in the last three days, trading at Rs 438.35 apiece on Monday.