One97 Communications Ltd., which owns digital wallet entity Paytm, said it will be investing Rs 10,000 crore over the next three years to boost its banking and financial services businesses. The firm is also likely to raise around $1.9 billion from Japanese conglomerate SoftBank, in what could be the biggest fund-raising round till date for the e-commerce sector in India.
"We will invest Rs 10,000 crore in our banking and financial services in the next three years. We hope to get the final approval for our payments bank operations soon, so that we can roll out services," news agency PTI quoted Paytm founder and CEO Vijay Shekhar Sharma as saying during a press conference on Friday in New Delhi.
The bank got final approval from the Reserve Bank of India (RBI) in January this year to commence operations as a payments bank.
In a related development, the Economic Times quoted sources as saying that SoftBank Group will be investing $1.9 billion in Paytm, taking the digital wallet's valuation to $9 billion from the previous $4.8 billion last September, when Taiwanese firm MediaTek invested in the fintech company.
"The deal was agreed on earlier this week and is now waiting for board approval," the daily quoted a source as saying, referring to the latest funding round.
One97 Communications investors include Alibaba Group, Ant Financial (AliPay), SAIF Partners, MediaTek, Sapphire Venture and Silicon Valley Bank.
Staying with payments bank, only two licencees — Airtel and India Post Payments Bank — have commenced operations despite the RBI giving "in-principle" licences to 11 applicants in August 2015 that included Vijay Shekhar Sharma. Three of the applicants — Tech Mahindra, Cholamandalam Finance and Dilip Shanghvi-IDFC Bank-Telenor JV — dropped out.
"The "in-principle" approval granted will be valid for a period of 18 months, during which time the applicants have to comply with the requirements under the Guidelines and fulfil the other conditions as may be stipulated by the Reserve Bank," the central bank said on August 19, 2015, while releasing the list.
Delhi-based One97 Communications is a Delhi-based company employing more than 4,500 people strong with regional offices in Mumbai, Bengaluru, Pune, Chennai and Kolkata with global presence in Africa, Europe, Middle East and Southeast Asia.
Industrialist Ratan Tata is one of the two advisors to the company's board of directors, besides being an investor since March 2015, though the amount invested is not known.
