One97 Communications Ltd founder Vijay Shekhar Sharma who runs digital wallet firm Paytm, is looking to raise funds to start his payment bank operations, according to an Economic Times article. The funding is expected to close in next couple of months.
Sharma recently got payment bank licence in August from Reserve Bank of India along with other 10 applicants like Airtel M Commerce Services, Reliance Industries, Vodafone m-pesa, Tech Mahindra etc.
One97 plans to invest between $25-$50 million into the bank until the operations become profitable, Sharma said in the ET article.
Sharma will own 51 per cent stake in the payment bank while the remaining 49 per cent can be held by corporate entities, as per the central bank mandate.
“We are looking at a combination of debt and equity and will dilute up to 1 per cent stake in our company to fund this portion in the bank,” Sharma further said.
He is also looking to hire 3,000 people for its payment banking firm, named Paytm Payment Bank Ltd, and plans to start operations in the beginning of next financial year.
Paytm which claims to have 10.4 crore users currently, is backed by Alibaba Group, SAIF Partners, SAP Ventures, Reliance Capital, Silicon Valley Bank and others. Sharma holds around 21 per cent stake after the latest funding round in September 2015 and Alibaba has become the largest investor post that.
Electronics payments company and marketplace Paytm is also splitting its digital wallet and e-commerce business into separate apps, and will focus on shopping with the current app.