Paytm plans to raise Rs12,000 cr from Japan’s SoftBank

Alibaba-backed online payments company Paytm is in talks for a fresh round of funding for investment in banking and finance, besides other expansion plans. The company is looking to raise around Rs12,000 crore from Japan's SoftBank, in the single-largest investment in an e-commerce company, several reports said today.

The funding, it is reported, could materialise within the next three weeks, though Paytm founder and chief executive officer Vijay Shekhar Sharma did not comment on the issue. 

Paytm, in tie-up with state-owned MMTC's Swiss venture PAMP SA, on Thursday launched a wealth-management platform that allows you to invest in gold for as low as Re1, in the first such initiative anywhere in the world. It announced the launch of 'Digital Gold', a vertical to allow its 200-million plus users to buy, store and sell gold instantly.

Sharma, speaking to reporters in New Delhi, referred to the new offer as a wealth management product that would be part of its proposed payments bank, still awaiting a final nod from the Reserve Bank of India.

The company would need around Rs10,000 crore of investments in banking and finance for over three years, Sharma pointed out. The company has been burning a lot of money while on the growth path. In the fourth quarter of FY2017, the company spent over $105 million on various projects, including expansion in Canada.

Payments banks can accept deposits from individuals and small businesses of up to Rs1 lakh per account. To deepen financial inclusion in the country, the RBI had allowed small finance banks and payments banks to start services.

Sources said the company has also seen interest from US-based high net worth individuals for investing in the company. While Sharma did not comment on the discussions, he said there is interest from across geographies for putting in funds.

Paytm has been one of the biggest beneficiaries of the government scrapping old notes of Rs500 and Rs1,000 late last year. At present, Paytm operates a mobile wallet and ecommerce marketplace. With over 1.5-billion transactions on its platform, the company aims to cross the 4.5-billion mark this year.

''We have seen significant growth and this year too, we expect to see manifold growth to 4.5 billion. A significant part of this growth is coming from tier-II and beyond cities,'' Sharma said.

''Customers can now buy and sell international quality gold at market-linked prices instantly for as low as Rs1 using their Paytm wallets. If a user wants to sell the gold, MMTC-PAMP will buy the gold back and the money will be transferred to his bank account,'' Sharma said, referring to the new wealth-management platform.

While the purchased gold can be stored in MMTC-PAMP's secure vaults free of charge, a consumer can also request for home delivery of minted coins or sell it back online instantly. The company did not elaborate on this, but it may get into gold loans as well. It's learnt to be already working on the plan. Estimates suggest gold worth $900 billion is stocked in homes and bank lockers in India.

Sharma added that smaller cities like Jaipur, Sonepat, Vijayawada, Visakhapatnam and Durgapur were among the fastest-growing for the company. At the end of March 2017, Paytm had 218-million mobile wallet users.