Switzerland-based reinsurance company Swiss Re plans to invest $127m in Paytm’s general insurance business to acquire a 23% stake on a fully diluted basis

Swiss Re will invest by way of equity shares and compulsorily convertible preference shares.

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The Noida, India-based financial services company said that the Swiss firm will make an upfront investment of $52.9m in Paytm Insuretech (PIT).

The remaining amount will be invested in tranches, subject to the achievement of some milestones.

Paytm founder and CEO Vijay Shekhar Sharma is also expected to invest in the entity, reported LiveMint. The investment is, however, subject to approval of the regulatory authorities.

Earlier this month, Economic Times reported citing sources that Swiss Re was said to be in talks with Paytm to join the board of its insurance business, and was planning to invest around $100m to acquire a 20-25% stake in the Indian payment startup.

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Paytm Insuretech intends to tap Paytm’s customer and merchant base to create new insurance products.

Sharma said: “We are excited to partner with Swiss Re for our insurance foray as a key strategic investor. It is an important milestone in our financial services journey of taking general insurance products to the masses. We look forward to gaining from Swiss Re’s global insurance capabilities and building innovative products to tap into the Indian market.”

This investment in the insurance arm of Paytm comes over a year after the acquisition of Mumbai-based general insurance firm Raheja QBE by Paytm Insuretech for $76m (Rs5.68bn). This transaction is yet to complete.