Image Source: Lakshmisreekanth, CC BY-SA 4.0, via Wikimedia Commons
Mumbai – One 97 Communications Limited (OCL), the parent company of Paytm, today announced a series of significant strategic decisions following a meeting of its Board of Directors.
The board convened to approve additional investments in its wholly-owned subsidiaries, undertake a comprehensive group restructuring, and note the discontinuation of real money gaming operations by its associate, First Games Technology Private Limited.
These moves are poised to streamline operations, enhance efficiency, and align the company with evolving regulatory landscapes.
Strategic Capital Infusion in Key Subsidiaries
The Board of Directors approved additional investments by way of subscription to equity shares via Rights Issue in two of its wholly-owned subsidiaries.
Paytm Money Limited (PML), an entity engaged in investment and wealth management services including stockbroking and mutual fund distribution, will receive an infusion of up to INR 300 Crores (Indian Rupees Three Hundred Crores only). For the fiscal year 2024–2025, PML had a turnover of INR 172.93 Crores.
Similarly, Paytm Services Private Limited (PSPL), which provides manpower supply and related services, will receive an investment of up to INR 155 Crores (Indian Rupees One Hundred Fifty Five Crores only). PSPL’s turnover for FY 2024-25 stood at INR 252.41 Crores.
Both investments are structured as cash considerations and are expected to be completed within 30 days. Importantly, these rights issues will not alter OCL’s 100% shareholding in either PML or PSPL, maintaining full control over these key operational arms.
These transactions are categorised as related party transactions, but as investments into wholly-owned subsidiaries, they are deemed to be at arm’s length.
Streamlining Corporate Structure Through Internal Restructuring
In a move aimed at simplifying the group structure and improving business efficiency, OCL’s board noted and approved several internal restructuring initiatives. A significant aspect of this restructuring involves the transfer of up to 100% equity shares of Foster Payment Networks Private Limited (an Associate Company) to One 97 Communications Limited.
This transfer, involving an aggregate amount of up to INR 61 Crores (Indian Rupees Sixty One Crores only) from Paytm Financial Services Limited and other shareholders, will result in Foster Payment becoming a wholly-owned subsidiary of OCL.
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