PwC quits as Paytm Payments Services' auditor, the stock falls by around 3%

8 Aug 2023 , 03:33 AM

PricewaterhouseCoopers (PwC) India has resigned as the auditor of Paytm Payments Services, which is an unexpected occurrence. On August 7, the payments aggregator Paytm made this statement. The new official auditor has been named, Kolkata-based SR Batliboi and Associates LLP in response to this departure. The business stated that the new auditors assumed their positions on August 7.

Shares of One97 Communications Ltd, the company that owns Paytm, fell over 3% in Tuesday’s BSE trading as a result of the revelation, compared to their previous close of Rs 850.75 per share. 

A change in auditors at the holding company level is what caused PwC to leave its position as auditor of Paytm Payments Services. A strategic step to improve synergies and consistency within the group’s audit process is the alignment of Paytm Payments Services’ auditor with the parent company’s auditor. PwC announced that it will issue an audit report for the financial statements ending March 31, 2023, dated May 2, 2023. For the unaudited special purpose interim condensed financial statements for the quarter ended June 30, 2023, the company also provided a restricted review report dated July 19, 2023.

After PwC’s five-year tenure was up, SR Batliboi and Associates were proposed as the replacement auditors, according to a March announcement by Paytm. This choice complies with Section 139(2) of the firms Act of 2013, which advises listed firms to rotate their auditors after a term of five years. It is significant to note that the resignation was not prompted by any worries or issues voiced by the Statutory Auditors. This action aligns Paytm with the selection of S.R. Batliboi and Associates as its auditor by One97 Communications Limited, its holding company.

A short time after Paytm’s parent company, One97 Communications Limited, released its financial results for the quarter ended June 30, 2023, PwC announced its resignation. Despite the economy’s difficulties during this time, Paytm reported a remarkable 39.4% increase in income. Notably, the business was able to cut its losses in half in Q1, from Rs 645 crore to Rs 358 crore.

Overall performance metrics for Paytm show positive development. Increased merchant subscription revenues are what caused the net payment margin to grow. Similarly, the payment processing margin increased as a result of non-UPI transactions such as cards and EMI instruments growing more quickly.

In a related event, Vijay Shekhar Sharma, the CEO of Paytm, and Antfin came to an arrangement. Sharma will consequently buy a sizeable 10.3% stake in Paytm. Sharma becomes one of the largest shareholders in Paytm as a result of this action, which strengthens his position as a significant stakeholder. Through an off-market transfer from Antfin to Sharma’s solely owned foreign company, Resilient Asset Management B.V., the stake acquisition will be made possible.

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