Startup Originals Team
Paytm, one of India’s leading fintech companies, is making headlines with a significant restructuring move. The company has announced an investment of ₹455 crore into its key subsidiaries while simultaneously discontinuing its real-money gaming operations under First Games, influenced by regulatory changes in India’s online gaming sector.
Paytm’s Investment Plan:
Paytm’s parent company, One97 Communications, approved the infusion of ₹455 crore into two wholly owned subsidiaries via a rights issue: ₹300 crore for Paytm Money and ₹155 crore for Paytm Services. Paytm Money focuses on investment and wealth management, while Paytm Services specializes in manpower supply and related operations. These investments are aimed at strengthening both businesses and supporting their growth over the next 30 days, with ownership stakes remaining unchanged.
Restructuring and Subsidiary Moves:
Beyond these investments, Paytm is simplifying its group structure. It will make Foster Payment Networks a fully owned subsidiary by transferring shares from Paytm Financial Services for up to ₹61 crore. Additionally, equity shares of First Games Technology will be transferred from Paytm Cloud Technologies to Paytm Services, valued at ₹140 crore.
Shutdown of Real-Money Gaming Business:
Paytm’s subsidiary, First Games, has officially ceased its real-money gaming (RMG) operations, following the enactment of the Promotion and Regulation of Online Gaming Act, 2025. This law introduced tighter regulations for the online gaming sector, prompting several companies including Paytm to discontinue RMG. First Games will now only offer social games that align with the new legal framework.
Financial Impact of Business Changes:
First Games’ financial contribution to Paytm’s consolidated earnings was minimal, constituting less than 1% in the quarter ending June 2025. Paytm holds a shareholder loan of approximately ₹200 crore for First Games, but its overall financial exposure remains limited. The carrying value of investment in First Games was declared nil.
Recent Workforce and Profitability Measures:
In addition to business restructuring, Paytm has reduced its workforce by about 4,600 employees in fiscal year 2025, enhancing profitability and focusing on core operations. The company reported its first-ever quarterly profit of ₹123 crore, marking a sharp turnaround from earlier losses.
Conclusion:
Paytm’s recent decisions reflect a proactive strategy to optimize its operations amid changing regulatory and market conditions. By investing in growth areas while exiting the regulated real-money gaming business, the company aims to sustain profitability and strengthen its position in the financial technology sector.
