PwC Bids Adieu, Paytm Embraces New Auditing Era with EY-Affiliated Firm
Paytm Prioritizes Financial Oversight with Smooth Auditor Transition
8 August 2023
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Kunal Tyagi
PwC India resigns as auditor of Paytm Payments Services (PPSL), a subsidiary of One97 Communications, effective August 7, 2023.
SR Batliboi & Associates, an EY-affiliated firm, takes over auditing duties for both PPSL and One97.
Paytm's decision to align audit practices across entities drives the smooth transition, emphasizing continuity in financial oversight.
In a recent turn of events, PricewaterhouseCoopers (PwC) India has stepped down from its role as the auditor of Paytm Payments Services (PPSL), a subsidiary of One97 Communications. The move, effective August 7, 2023, has paved the way for SR Batliboi & Associates, an EY-affiliated firm, to take over auditing responsibilities for both One97 and PPSL. This decision comes amidst a series of strategic moves and regulatory changes within the company.
The resignation, announced via a regulatory filing, reportedly stemmed from Paytm's desire to synchronize audit practices across its entities. The outgoing auditor, PwC India, clarified that it had no concerns or issues regarding Paytm's B2B arm. Instead, the move aligns with the company's practice of matching the auditors of subsidiaries with those of the holding company for consistency and synergy in the audit process.
Paytm, a major player in the fintech landscape, emphasized that the decision was endorsed by the company's board of directors. Despite the transition, Paytm asserted that PwC India had not flagged any issues related to its B2B vertical. This smooth transfer of auditing responsibilities reflects Paytm's commitment to maintaining robust financial oversight even amid changes.
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The development gains significance in the context of Paytm's growth trajectory. PPSL, established as a subsidiary in 2020 and entrusted with Paytm's online payment aggregation business, underwent a transformation in 2021. However, its journey was marred by regulatory hurdles, including a reapplication for a payment aggregator license following RBI's directive. These challenges haven't deterred PPSL from adapting and pursuing its goal of onboarding more merchants, accompanied by structural changes.
On the same day as the auditor resignation, another major shift occurred within Paytm. CEO Vijay Shekhar Sharma acquired a 10.3% stake in the company from Antfin Holdings BV, an arm of the Chinese conglomerate Ant Group. This move reflects the company's commitment to expanding and solidifying its ownership structure, even as it continues to expand its loan business and merchant payments verticals.
As Paytm forges ahead, the company's focus on profitability remains apparent. In the first quarter of FY24, Paytm managed to reduce its consolidated net loss to INR 358.4 Cr, marking a significant improvement compared to the INR 645.4 Cr loss reported in the same period of the previous fiscal year. This shift highlights the company's determination to strike a balance between growth and fiscal responsibility.
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