Paytm expands overseas with new subsidiaries in Indonesia, Luxembourg; dilutes stake in UAE payments arm

Listed fintech firm Paytm has moved to deepen its overseas expansion while reshaping ownership at its UAE payments arm, as it looks to export its merchant payments and financial services technology stack to international markets and strengthen its regulated payments infrastructure.

In a stock exchange filing on December 22, Paytm said its cloud arm, Paytm Cloud Technologies Limited (PCTL), has approved the incorporation of two new wholly owned subsidiaries in Indonesia and Luxembourg.

Both entities will be set up as step-down subsidiaries of One 97 Communications Limited and will focus on expanding the distribution of Paytm’s technology-led merchant payments and financial services offerings through a mix of organic expansion, local licences, strategic partnerships and investments.

Paytm plans to invest up to Rs 25 crore in each subsidiary, in one or more tranches, at face value.

Alongside this, Paytm also announced a change in shareholding at Paytm Arab Payments LLC, its UAE-based payments unit incorporated in April 2025.

The board of Paytm Arab Payments has approved the issuance of 76,862 equity shares of face value AED 100 each, representing 49% of its post-issue paid-up share capital, to Abbar Global Opportunities Holdings Limited, an Abu Dhabi Global Market-incorporated entity. The investment vehicle is linked to Mohamed Alabbar, founder of Emaar Properties and co-founder of Noon.

The transaction values the investment at approximately AED 7.69 million, or about Rs 18.7 crore. Once completed, Paytm Arab Payments will cease to be a wholly owned subsidiary of PCTL and will operate as a 51%-owned subsidiary, with Paytm retaining management control. The share subscription agreement was executed on December 22, and the transaction is expected to close by February 28, 2026, subject to necessary approvals .

The overseas expansion comes as Paytm continues to reorganise its payments business following regulatory actions against Paytm Payments Bank in 2024. As part of this process, the company transferred its offline merchant payments business to Paytm Payments Services Limited (PPSL) in November, at a book value of Rs 960 crore for FY25, citing regulatory compliance and operational efficiency. PPSL has since emerged as the group’s core payments vehicle.

Recently, PPSL received key approvals from the RBI to operate as a payment aggregator across online, offline and cross-border transactions, both inward and outward. Paytm has also infused additional capital into the subsidiary. On December 12, it completed a further Rs 2,250 crore investment through a rights issue to strengthen net worth, support working capital requirements and scale merchant payments infrastructure.

Paytm has said its international initiatives are expected to start contributing meaningfully over the next three years, driven by its technology-led merchant payments and financial services model. The company has already begun testing cross-border use cases, including rolling out UPI access for NRIs in 12 countries in October and launching UPI International in select overseas markets in late 2024.

On the domestic front, Paytm is doubling down on payments as its core revenue engine. In Q2 FY26, net payment revenue rose 28% year-on-year to Rs 594 crore, while merchant subscription volumes increased to 1.37 crore. The company reported a net profit of Rs 21 crore during the quarter.