Digital financial services company One97 Communications, which operates under the Paytm brand, said on Saturday that it has formed a joint venture general insurance company to which it is committed to investing Rs 950 crore over a period of 10 years.
The proposal to set up joint venture firm Paytm General Insurance Limited (PGIL) was approved by the board on May 20, the company said in a regulatory filing.
Initially, One97 Communications (OCL) will hold 49 per cent stake in PGIL and the remaining 51 per cent will be owned by VSS Holding Pvt Ltd (VHPL), a company owned and controlled by Vijay Shekhar Sharma, managing director of OCL.
After the investment, Paytm will hold 74 percent stake in PGIL, reducing VHPL’s stake in the company to 26 percent.
“PGIL wants to register and operate a general insurance business. PGIL has not yet started its general insurance business, which is currently subject to receipt of registration certificate from IRDAI (India Regulatory and Development Authority of India), ”the filing said.
The Paytm Board’s decision came after Raheja QBE General Insurance Company Limited’s acquisition of a share purchase agreement did not expire its group firm’s transactions within the stipulated time.
In July 2020, Paytm announced that the company would acquire Raheja QBE, a Mumbai-based private sector general insurance company, along with its founder Vijay Shekhar Sharma.
In its exchange filing, OCL said it had re-appointed Sharma as its managing director for five years. The company’s Group CFO and President Madhur Deora have been appointed on its board as full-time directors for the next five years.