In a recent turn of events, Jio Financial Services Limited (JFSL) has clarified that it is not in talks with One97 Communications, the parent company of Paytm, to acquire Paytm’s wallet business. The speculations around Jio Financial’s negotiation for a deal with Paytm have been debunked, and the company has vehemently denied any ongoing discussions related to acquiring Paytm’s wallet business.
Setting the Record Straight
Contrary to the buzzing rumors about billionaire tycoon Mukesh Ambani’s JFSL making significant strides in business with a 14% surge in its shares due to potential acquisition talks of Paytm’s wallet business, Jio Financial Services Limited has made it clear late on Monday that it is not engaging in any discussions with One97 Communications for the purchase of Paytm’s wallet business.
JFSL’s Late-Night Regulatory Filing
In a late-night regulatory filing, JFSL stated, “We clarify that the news is speculative, and we are not in any discussions about it.” The Bombay Stock Exchange (BSE) had requested comments from Jio Financial regarding reports claiming negotiations with One97 for acquiring Paytm’s wallet business.
Unraveling the Paytm Payments Bank Crisis
On January 31, the Reserve Bank of India issued an order directing Paytm Payments Bank Limited not to accept deposits or top-ups in any customer accounts, prepaid instruments, wallets, and fast-tags after February 29, 2024. According to RBI’s order, customers of Paytm wallet can continue using it until their balance is exhausted, but they won’t be able to add money after February 29. If RBI’s stance remains firm, top-ups for Paytm wallet will be suspended, and transactions through it will be restricted. RBI had earlier, on March 11, 2022, halted new customer registrations for Paytm Payments Bank.
Continuous Decline in Paytm Shares
Since the news broke on January 31 about the Reserve Bank of India considering the cancellation of Paytm Payments Bank’s banking license, there has been a continuous decline in Paytm’s share value. In three consecutive trading sessions on February 1, 2, and 5, Paytm’s shares experienced lower circuits. Since RBI imposed a ban on banking services due to non-compliance by Paytm Payments Bank, the shares have witnessed a drastic 42% decline in just three days, resulting in a loss of ₹20,500 crores for Paytm investors.
Jio Financial’s Remarkable Leap
After the news surfaced regarding Jio Financial’s potential acquisition of Paytm’s wallet business, JFSL’s shares witnessed a spectacular jump of 14% on the BSE, closing at ₹289. Jio Financial’s shares had been listed on stock exchanges last year after separating from the main unit of Reliance Industries Limited.
Assurances from Paytm CEO
Despite the regulatory challenges and uncertainties, Paytm’s CEO, Vijay Shekhar Sharma, reassures users that the Paytm app will continue to operate as usual even after February 29. He emphasized this point in a recent post and blog on Paytm’s website, stating that their UPI services will continue to function normally as the company collaborates with other banks to keep it running.