After the RBI imposed a crushing ban on Paytm Payments Bank (PPBL), an affiliate firm, on January 31, Paytm announced a net loss of Rs 550 crore for Q4FY24 on May 22, a 3.2X increase. This was due to a decline in its margins.
Paytm has recorded impairment losses on an investment in Paytm Payments Bank Limited (PPBL), an affiliated company, totaling Rs 227.1 crore.
"The value of the Company’s investment in PPBL gets harmed and, accordingly, has recorded an impairment provision of Rs 227 crore, representing the current fair value of its investment in PPBL further disclosed the same as Restoration of investment in associate," the financial statement said.
The corporation, which has a 49 percent stake in PPBL, said that since the limits on January 31, 2024, which prompted the decision, there has been "ongoing uncertainty" with regard to PPBL's commercial activities.
"The RBI intervention has had a major effect on PPBL's operations. The business has accounted for its share of losses and OCI of PPBL according to unaudited financial details of PPBL in the period ending for the year ended March 31, 2024, as the audited financial accounts of PPBL are not yet available," the statement said.
On January 31, 2024, the central bank requested that PPBL cease providing banking services with effect from March 2024, citing potential violations and non-adherence to regulatory rules.
Paytm stopped all significant commercial operations with PPBL after terminating its nodal accounts with the company in response to the RBI's measures.
Paytm revealed a 3.2X increase in net loss of Rs 550 crore for Q4FY24 on May 22. This was due to a decline in its margins after the RBI's severe restriction on PPBL on January 31.
Compared to the same time previous year, when income from operations was Rs 2,334 crore, the revenue from operations decreased by 2.9 percent (YoY) to Rs 2,267.10 crore.
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