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diksha shah made post

Why is Paytm taking a stake in the insurance unit of Prism Johnson?

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Dhwani Mehta answered.
4 weeks ago

One of India’s recent tech billionaires, Vijay Sekhar Sharma, the founder of Paytm, will take a 10% stake in Raheja QBE Insurance Company, a unit of Prism Johnson. It may be noted that Prime Johnson is part of the Raheja group of Mumbai. Paytm had emerged as a unicorn in the post demonetization period and is today among the most valuable digital companies.

Paytm is already into marketing of mutual funds. This is the first insurance foray of Paytm which owns one of India’s largest digital platforms. Post demonetization, digital platforms like Paytm got a mega boost and they got a second boost from the COVID lockdown. Financial services have become the new thrust area for the Paytm digital platform.

Of course, this acquisition of the general insurance business of the Raheja group will be subject to IRDA approval. Once this is done, Paytm becomes a licensed insurance policy originator in general insurance and it can use its digital franchise to sell insurance to clients. This would give Paytm a rare edge in the general insurance business.