Paytm Cloud will Open Subsidiaries in Singapore, Saudi Arabia, and the United Arab Emirates
As the Vijay Shekhar Sharma-led fintech giant Paytm seeks to grow and monetise its tech-enabled payments and financial services in global markets, it intends to establish three new companies through its subsidiary Paytm Cloud Technologies in the United Arab Emirates, Saudi Arabia, and Singapore. The company stated in an exchange filing on January 20 that the board of its wholly owned subsidiary, Paytm Cloud Technologies Limited (PCTL), had given its approval for the three new businesses to be incorporated. These companies will become Paytm's step-down subsidiaries after they are established. Paytm thinks there is room for growth in comparable foreign countries with its technology-driven merchant payments and financial services distribution business strategy in India. According to Paytm, the company has created a portfolio of cutting-edge hardware, software, and services in India that can be used and profited from globally.
Options Considered by Paytm
According to the publicly traded fintech, Paytm is looking into a number of options in these foreign markets, such as partnerships, local licensing, strategic investment, and inorganic growth. Within six months, the wholly owned subsidiaries will be established, requiring an initial investment of up to INR 20 Cr in one or more tranches for each of these business units. The board of Mobiquest Mobile Technologies, another Paytm affiliate, has given the company permission to sell off all of its 100% ownership in Xceed IT Solutions, a wholly owned subsidiary. Vineet Narang and Sabina Kamal, the current directors of Xceed IT, will purchase these shares for INR 60,728 in cash. In the information technology (IT) industry, Mobiquest Mobile Technologies offers computer programming, consulting, and associated services.
Financial Dynamics of Paytm
In the third quarter of the fiscal year 2024-25 (Q3 FY25), Paytm was able to reduce its consolidated net loss from INR 221.7 Cr in the previous quarter to INR 208.5 Cr, a 6% decrease. In the September quarter of the current fiscal year, the corporation declared a net profit of INR 930 Cr. From INR 2,850.5 Cr in the same time last year to INR 1,827.8 Cr in the current quarter, operating revenue fell 36%. On the other hand, it increased 10% from INR 1,659.5 Cr on a quarterly basis.
India’s Fintech Ecosystem Still Leading the Global Race
In spite of this downturn, the Indian fintech ecosystem is one of the top three globally financed fintech ecosystems in H1 2024, after the US and the UK. According to Tracxn's Geo Semi Annual Fintech India Report for H1 2024, the ongoing funding winter and a number of other geopolitical challenges are to blame for the funding fall. Compared to one in H2 2023, two funding rounds totalling more than $100 million were observed during that time. These include the $120 million Series C funding round raised by lending platform Avanse and the $144 million Series D funding round raised by non-banking lender Credit Saison.
Nitin Konde
