8 MAY2022Paytm's proposed deal to acquire a 100 percent stake in Raheja QBE General Insurance is off, nearly two years after the digital payments firm first announced its plan for the acquisition. In a stock exchange filing late on Sunday night, Paytm parent One97 Communications (OCL) said "the share sale and purchase transaction has not been consummated within the time period envisaged by the parties under the said agreement, the agreement has automatically terminated".Prism Johnson, which held 51 percent in Raheja QBE General Insurance, also told the BSE in a filing that the deal stands terminated. "The board of directors of the company will continue to evaluate the future prospects of the company's investment in RQBE from time-to-time and will provide necessary updates/disclosures in accordance with applicable law," it said in the BSE filing. Paytm's acquisition of RQBE was for Rs. 568 crore, and the digital payments major was expected to launch its insurance operations this year. Paytm founder Vijay Shekhar Sharma was expected to invest the proceeds from his One97's offer for sale to fund his stake in Paytm Insuretech. In its red herring prospectus (RHP), Paytm had said Sharma will hold over 60 percent stake in the unit.Swiss Re announced last October that it will invest around Rs.920 crore (or $127 million) for a 23 percent stake in Paytm Insuretech. It is not immediately clear what happens to Swiss Re's investment following the Raheja QBE deal being terminated. The earlier plan was that Paytm would lend Rs. 743 crore to the Sharma-owned investment entities--VSS Investco and VSS Holdings, which was later abandoned right before the IPO. Paytm said it remains bullish on its roadmap for general insurance and intends to seek requisite approvals for a new general insurance licence where it plans to hold a 74 percent majority shareholding upfront. At present, Paytm has an insurance distribution license through ­ Paytm Life Insurance Corporation and Paytm General Insurance Corporation ­ incorporated in 2018. IN FOCUSPAYTM'S GENERAL INSURANCE DEAL WITH RAHEJA QBE TERMINATEDPAYTM'S GENERAL INSURANCE DEAL WITH RAHEJA QBE TERMINATED
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