Jio Financial's Shares Soar Amid Talks of Potential Acquisition of Paytm's Wallet Business

Mukesh Ambani's Jio Financial Services sees a surge of 14% in shares following reports of potential acquisition talks with Paytm's parent company, One 97 Communications. The Hindu Business Line suggests that HDFC Bank and Jio Financial are leading contenders for acquiring Paytm's wallet business. Talks with Jio Financial reportedly began in November, while discussions with HDFC Bank intensified just before the Reserve Bank of India's (RBI) ban on Paytm Payments Bank.

Facing an existential crisis due to the RBI's restrictions on accepting deposits or credits, Paytm may undergo acquisition by Jio as part of a broader rescue plan. Jio Financial, which owns Jio Payments Bank, has already re-platformed to introduce digital savings accounts and bill payments, further expanding its services with debit cards and innovations like the Jio Voice box and UPI-enabled Jio phones.

As Paytm grapples with allegations of being used for money laundering, the Enforcement Directorate is reportedly investigating the possibility. Paytm vehemently denies these claims, asserting that neither the company nor its CEO, Vijay Shekhar Sharma, is under investigation. Despite this, Paytm's shares plummeted by 42% in just three days after the RBI directive.

In a virtual town hall with Paytm Payment Bank Ltd (PPBL) employees, Vijay Shekhar Sharma reassured them, stating that they are part of the Paytm family, and efforts are underway to address the situation. He expressed confidence that the company, with the support of several banks, will navigate the challenges and seek resolutions with the RBI.