In a stock exchange filing late on Sunday night, Paytm parent One97 Communications (OCL) said “the share sale and purchase transaction has not been consummated within the time period envisaged by the parties under the said agreement, the agreement has automatically terminated.”
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Paytm’s acquisition of RQBE was for Rs 568 crore, and the digital payments major was expected to launch its insurance operations this year. Paytm founder Vijay Shekhar Sharma was expected to invest the proceeds from his One97’s offer for sale to fund his stake in Paytm Insuretech. In its red herring prospectus (RHP), Paytm had said Sharma will hold over 60% stake in the unit.
Swiss Re announced last October that it will invest around Rs 920 crore (or $127 million) for a 23% stake in Paytm Insuretech. It is not immediately clear what happens to Swiss Re’s investment following the Raheja QBE deal being terminated.
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Paytm said it remains bullish on its roadmap for general insurance and intends to seek requisite approvals for a new general insurance licence where it plans to hold a 74% majority shareholding upfront.
At present, Paytm has an insurance distribution license through – Paytm Life Insurance Corporation and Paytm General Insurance Corporation – incorporated in 2018.