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UBS looks at picking up $400 million stake in Paytm: Report

Swiss global banking giant UBS Group AG is in talks to pickup a $400 million stake in Paytm, Bloomberg reported. A fund run by the multinational investment bank is in discussion to pickup a stake in the digital payments giant, alongside some of the bank’s clients, the report says.

Paytm, which was valued at $16 billion during a 2019 funding round, has been making inroads across the financial services industry in India on top of its digital payments wallet. At present, Paytm’s universe of services now include payment gateway services, e-wallets, credit products for individuals and micro and small merchants, gold investments, a mutual funds platform, derivatives and stock trading among other products.

The Bloomberg report says that UBS plans to finalize the deal by the end of this month, which will involve purchasing stock from a group of Paytm employees. This means that Paytm is not raising any new capital as part of the deal.

Paytm’s multiple areas of operation

Paytm’s parent company One97 Communications Ltd also has a payments bank license, gaming platform Paytm First Games, and e-commerce platform Paytm Mall. In October 2020, it also launched what it called a “mini app store” within its app in order to compete with Google’s Android Play Store. The company says it has over 450 million Paytm wallet users and processes over 700 million monthly merchant transactions.

By targeting young and first-time investors Paytm Money, the investment platform, has grown manifold in the last few years with over 6.6 million investors and clocks over ₹ 20 crore worth of investments on a daily basis. In FY20, the payments bank reported a net-profit of ₹29.8 crore up from ₹19.2 crore in the previous year. It made ₹2,100 crore in revenues in the previous fiscal year . It claims to have 58 million current and savings account deposits accruing to over ₹1,000 crore. While the payments bank has issues 5.8 crore digital debit cards, it recently partnered with SBI Cards and Payment Services Ltd to provide credit card offerings to the banks’ customers.

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