Shares of One 97 Communications, Paytm’s parent company, experienced a surge of over 2% on Thursday in response to a series of noteworthy developments.
Key Decisions by Paytm’s Board
During a board meeting held on Wednesday, several crucial resolutions were addressed.
Sale of Entertainment Ticketing Business to Zomato
A pivotal decision involved the approval to divest Paytm’s entertainment ticketing business to Zomato, the leading food-delivery platform, for a sum of ₹2,048 crore. This transaction encompasses Paytm’s entire entertainment ticketing operations, encompassing tickets for movies, sports, and various events. Following this move, the fintech company intends to enhance its focus on its core payments and financial services.
Revisions to Non-Executive Independent Directors’ Remuneration
In addition, the board sanctioned alterations to the compensation structure for non-executive independent directors within the company. Under the newly established framework, the directors’ salaries have been subject to a maximum limit of ₹48 lakh per annum, incorporating a fixed component of ₹20 lakh. Previously, the salaries of these directors fluctuated between ₹1.7 crore and ₹2 crore. These modifications have been implemented retroactively, commencing from April 1, 2024.
Regulatory Challenges Faced by Paytm
Earlier in the year, Paytm encountered substantial regulatory scrutiny when the Reserve Bank of India (RBI) imposed restrictions on Paytm Payments Bank, prohibiting it from onboarding new customers and executing credit transactions with existing accounts. Additionally, limitations were placed on prepaid instruments, wallets, FASTags, and National Common Mobility Cards (NCMC).
The RBI’s decision stemmed from subsequent evaluations conducted by external auditors, which revealed instances of non-compliance and considerable supervisory concerns pertaining to the bank’s operations.
Paytm’s recent strategic moves, including the divestment of its entertainment ticketing business and revisions to its directors’ remuneration, signal a concerted effort to streamline operations and refocus on its core strengths in payments and financial services. These developments, along with the earlier regulatory challenges faced by the company, underscore a period of transformation for Paytm. The market’s positive response to these changes, as reflected in the rise in share prices, suggests optimism about the company’s future trajectory.
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