One97 Communications Ltd., which operates under the Paytm brand, has formed a joint venture general insurance company in which it plans to invest Rs 950 crore over a period of 10 years.
The proposal to set up Paytm General Insurance Ltd. was approved by the board on May 20, One97 said in a regulatory filing on Saturday.
Initially, One97 Communications Ltd. will hold 49% stake in Paytm General Insurance while the rest will be with VSS Holding Pvt. Ltd., an entity owned and controlled by CEO Vijay Shekhar Sharma. Post the investment, Paytm will hold 74% stake in Paytm General Insurance, reducing VSS Holding's stake in the company to 26%.
"PGIL intends to register for and undertake general insurance business. PGIL is yet to commence its general insurance business, which is presently subject to receipt of certificate of registration from IRDAI, i.e., Insurance Regulatory and Development Authority of India," the filing stated.
The decision of the Paytm board came after its group firm's transaction into a share purchase agreement to acquire Raheja QBE General Insurance Co. Ltd. did not consummate within stipulated time frame.
Paytm had in July 2020 announced that the company along with its founder Vijay Shekhar Sharma will acquire the Mumbai-based Raheja QBE.
In its Saturday filing, One97 Communications said that it has reappointed Sharma as its managing director for five years. Group CFO and President Madhur Deora has been appointed on the company's board as a whole-time director for the next five years.
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