The company is to convene an extraordinary general meeting (EGM) on 23 September to seek shareholder approval for setting up Paytm Payments Services Ltd that will house its online payment aggregator and payment gateway business.

In the letter to shareholders, One97 Communications said the transfer of its payments business will be made on a slump sale basis for a lump sum of Rs 275-350 crore, which it will receive in five equated annual installments.

The actual consideration will be derived based on the book value appearing as of 31 August 2021, it said.

In March 2020, the Reserve Bank of India (RBI) issued new guidelines for payment aggregators and payment gateways, in a bid to further regulate the sector. The guidelines stated that non-banking entities offering payment aggregator services need to apply for fresh authorization.

The guidelines also stated that the non-banking entities will have to separate their payment aggregator and gateway businesses from their marketplace business.

Paytm applied for fresh authorization for its payment aggregator and gateway business last December, said a person aware of the matter on the condition of anonymity.

“The ‘Pre-IPO Open application feature was specially designed to make the lives of such users better. A user can now place an IPO order 24×7 on days when the “pre-Open IPO Application” Feature is enabled. The order is recorded on Paytm Money’s system and sent to the exchange for processing whenever the IPO opens. The user is notified of her application status throughout the journey, to ensure a seamless experience,” Paytm Money said in a blog.

The digital broker also cited the issue of congestion in serves on networks during popular IPOs, driven by high demand during a short time span. “As this feature gains traction, it might be possible to spread out the Pre-Open IPO application evenly during the market hours, reducing load on exchanges and payment gateways, and ensuring a better experience for broad market participants,” it added in the blog.