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Bharti Airtel is rumoured to be interested in purchasing Paytm shares from other owners. According to sources, this is not the first time Bharti Airtel has discussed selling its fintech subsidiary with Paytm. Airtel Payments Bank began operations in January 2017 and now serves more than 130 million users throughout the country.

Airtel Payments Bank and Paytm Payments Bank may merge, resulting in a massive consolidation in the Indian fintech market. According to people familiar with the situation, Sunil Mittal’s Bharti Enterprises is aiming to merge its payments bank subsidiary with the fintech firm instead of a stock acquisition. In addition, the telecom magnate is attempting to acquire Paytm shares from other owners.

According to sources, Airtel and Paytm are still in the early stages of negotiations, and the agreement may not materialise. According to sources, this is not the first time BhartiAirtel has discussed selling its fintech subsidiary with Paytm. But, the acquisition is expected to be driven by concerns over customer overlap between Airtel Payments Bank and Paytm Payments Bank.

Furthermore, Airtel’s payments bank is a lucrative firm that might bolster Paytm’s financials, which have been weighed down by rising losses. The agreement may also allow Paytm to use Airtel’s payments bank licence, as the fintech giant is presently prohibited by the Reserve Bank of India (RBI) from onboarding new clients due to deficiencies in its IT infrastructure.

The news comes just a few months after it was announced that Airtel Payments Bank was planning to float on the stock exchanges in the near future. It was not immediately clear what motivated Airtel’s decision, given that the telecom giant’s financial subsidiary is profitable.

Airtel Payments Bank began operations in January 2017 with a $440 million initial investment and now serves more than 130 million clients and has an annualised income of INR 1,000 crore as of December 2022.

Airtel was one of the first 11 corporations to be granted permission to operate as payment banks. Smaller margins, fierce rivalry, and a longer threshold period required for payments banks to turn profitable have primarily afflicted the market.

Paytm, on the other hand, has been harmed by bad market conditions, which have reduced its stock prices. Paytm’s stock price has dropped the most among large-cap Indian new-age digital companies, plunging more than 60-70% since its initial public offering in late 2021.

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