Homegrown e-commerce brand Paytm's investment subsidiary, Paytm Money, has received the approval from Sebi to become a registered investment adviser. The approval could open the possibilities of investment for the company, which is already spreading across various verticals like digital payments, Paytm Mall, among others. At first, the company is planning to launch mutual funds investments for its customers.
"Paytm Money is currently completing integrations with the respective compliance and regulatory authorities for KYC (Know Your Customer) under the Sebi regulations. It is also integrating all leading AMCs (Asset Management Companies) in India," a Paytm release stated.
The platform has planned a limited rollout of investment products, starting with direct plan mutual funds investments with zero commissions. The company will have a separate app available for both Android and iOS users. "We are committed in our mission to make wealth management easier and more accessible for the masses. The Sebi approval to our request for an investment adviser licence puts us on track for our planned launch date of April," Paytm Money Senior Vice-President Pravin Jadhav said.
Besides this, the company's another subsidiary Paytm Mall is already in talks with Japanese investment group SoftBank to raise Rs 3,000 crore. This is in addition to its talks with Singapore's Temasek Holdings and China's Primavera Capital Group to raise another Rs 1,000 crore. Once the SoftBank deal goes through, Paytm Mall is likely to be valued at Rs 13,000 crore, putting it in the 'unicorn' bracket or a billion dollar startup.
Currently, Chinese e-commerce site Alibaba and its payment affiliate Ant Financial hold a majority stake in Paytm Mall. Alibaba and SAIF Partners have pumped in $200 million in Paytm Mall, but after this round of funding, Alibaba and Ant Financial, which accounts for 55 per cent shareholding, would be reduced to a significant minority.
Paytm founder Vijay Shekhar Sharma's company recently reached a valuation of $10 billion. This valuation came in January after a secondary sale where some current and former employees were given an opportunity to sell their ESOPs (Employee Stock Ownership Plan). Two hundred employees liquidated their ESOPs for $50 million. Paytm is currently the second most valuable internet firm in India after Flipkart, which has a valuation of $12 billion.