Paytm to invest Rs 2,250 crore into payments arm PPSL via rights issue

Paytm is investing ₹2,250 crore into its payments arm as it works to meet new regulatory deadlines and restructure its large fintech ecosystem.

The investment will be directed to Paytm Payments Services Ltd (PPSL), a fully owned subsidiary set up as the central hub for all of Paytm’s merchant payment operations, covering both online and offline transactions.

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The restructuring is in response to stricter payment aggregator guidelines issued by the Reserve Bank of India on September 15, 2025. The new rules require a clear separation between entities that handle payments and those managing other business lines.

Paytm has already begun restructuring. Its offline merchant payments business—including QR codes at local kirana stores, soundboxes that confirm payments, and card machines—has been moved to PPSL. This unit generated around ₹2,580 crore in revenue last fiscal year, making up nearly half of Paytm’s standalone sales.

PPSL already operates Paytm’s online payment gateway business, reporting ₹1,171.6 crore in revenue in FY25. By consolidating online and offline payment operations under PPSL, Paytm aims to improve efficiency and comply with the RBI’s new regulations.

In a related step, Paytm has taken full control of Paytm Financial Services Ltd (PFSL) by acquiring an additional 51% stake from founder Vijay Shekhar Sharma and his investment vehicles for a nominal ₹0.5 crore, making PFSL a wholly owned subsidiary.

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The ₹2,250 crore capital infusion into PPSL will be completed in cash by December 31, 2025. Since PPSL is already fully owned by parent One97 Communications, the investment won’t change ownership but will strengthen the balance sheet as Paytm prepares for heightened regulatory and operational scrutiny.

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