One97 Communications, the parent of digital payments and financial services major Paytm, has said the proposed acquisition of Raheja QBE General Insurance has been called off.

“As 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,” it said in a stock exchange filing.  

Paytm plans to seek requisite approvals for a new general insurance licence, wherein it will hold a 74 per cent majority shareholding upfront, it further said.

Direct majority shareholding

According to sources, One97 Communications will have a direct majority shareholding instead of the earlier proposed fully diluted shareholding of 11 per cent.

Paytm has already forayed into financial services as its partner-based lending business has recorded rapid growth. This, along with the growing technology-led insurance penetration in the country, gives it confidence to file for a new application, the source said.

Paytm lnsuretech Private Limited had in July 2020 entered into a share purchase agreement to acquire 100 per cent of Raheja QBE General Insurance Company.

The Mumbai-based general insurer, which started operations in 2009, is a joint venture with 51 per cent stake with Prism Johnson and 49 per cent ownership with QBE Australia.

Paytm was to acquire stakes of both the JV partners.

Meanwhile, in a separate stock exchange filing, Prism Johnson said that as the share sale and purchase transaction has not been consummated within the time period envisaged by the parties under the agreement, the agreement has automatically terminated.

“The board of directors of the company will continue to evaluate the future prospects of the company’s investment in RQBE from time-to-time and will provide necessary updates, disclosures in accordance with applicable law,” Prism Johnson said.

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