“Mukesh Ambani Considers Acquiring Paytm Wallet, Boosts Jio Financial”
In the midst of Paytm’s ongoing crisis following the Reserve Bank of India’s (RBI) restrictions, reports have surfaced suggesting that Mukesh Ambani’s Jio Financial Services is in discussions to acquire Paytm’s wallet business. The news caused a surge in Jio Financial Services shares by up to 14%, reaching a day’s high of ₹288.75 on the Bombay Stock Exchange (BSE).
In the midst of Paytm’s ongoing crisis following the Reserve Bank of India’s (RBI) restrictions, reports have surfaced suggesting that Mukesh Ambani’s Jio Financial Services is in discussions to acquire Paytm’s wallet business. The news caused a surge in Jio Financial Services shares by up to 14%, reaching a day’s high of ₹288.75 on the Bombay Stock Exchange (BSE).
The Hindu Business Line reported that One 97 Communications, Paytm’s parent company, is in talks with Jio Financial and private sector lender HDFC Bank to potentially sell its wallet business. While Jio Financial later clarified that it has not been in negotiations, the report indicates that HDFC Bank and Jio Financial are among the frontrunners for the acquisition.
According to sources, talks between Paytm CEO Vijay Shekhar Sharma’s team and Jio Financial have been ongoing since November, while discussions with HDFC Bank commenced just before the RBI imposed restrictions on Paytm Payments Bank. As part of a larger bailout plan, Jio may offer to acquire Paytm Payments Bank, which has faced an existential crisis following the RBI’s prohibition on accepting deposits or credits to customer accounts.
The RBI’s action stemmed from concerns about the possibility of Paytm Payments Bank being used to launder money, as reported earlier by PTI. Paytm has vehemently denied these allegations, stating that neither the company nor its founder and CEO are under investigation by the Enforcement Directorate on money laundering charges.
Paytm’s shares witnessed a significant downturn, losing 42% in just three days following the RBI’s directive. The potential acquisition by Jio Financial could be a strategic move to navigate Paytm’s current challenges.
Jio Financial, which owns Jio Payments Bank, has been actively repositioning itself by launching digital savings accounts and bill payments. With a ground network of 2,400 business correspondents, it has also introduced debit cards. The company has undertaken innovative initiatives, including the pilot launch of Jio Voice box, enabling Jio phones with UPI, and implementing QR codes across its ecosystem.
Meanwhile, Paytm CEO Vijay Shekhar Sharma sought to reassure employees during a virtual town hall at Paytm Payment Bank Ltd (PPBL). He emphasized that employees are part of the Paytm family and assured them that there is nothing to worry about. Sharma acknowledged the uncertainty surrounding the situation and expressed confidence in resolving the issues by reaching out to the RBI.
As talks unfold and the crisis continues, the fate of Paytm’s wallet business remains uncertain, with industry watchers closely monitoring the developments between Paytm, Jio Financial, and HDFC Bank.
Sources By Agencies
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