Founder and CEO of One 97 Communications Limited Vijay Shekhar Sharma and Antfin have reached an agreement that Sharma will purchase a 10.3% stake in Paytm, the company notified exchanges on May 7. 8.
According to the filing, an offshore entity owned by Sharma will purchase a stake in Paytm from Antfin through an off-market transfer. Following the close of this transaction, Sharma’s stake in Paytm will increase to 19.42%, while Antfin’s stake will increase to 13.5%.
The announcement sent Paytm shares up more than 10% from their previous close. As of 10am, the stock was trading at Rs 851 on the National Stock Exchange. Antfin currently owns 23.79% of Paytm’s capital, but after the transaction, Antfin will no longer be the main shareholder of this fintech giant. There is also no candidate from Antfin for Paytm’s board. Based on the stock’s closing price on August 4, the value of the 10.3% stake is $628 million.
“I am proud of Paytm’s role as a true champion of Indian-made financial innovation and our achievements in revolutionizing mobile payments and helping bring services to the world. official financial services into the country. As we announce this transfer of ownership, I would like to express my sincere gratitude to Ant for their unwavering support and partnership over the years,” said Sharma. After the Doklam skirmish between the Indian and Chinese armies, the Indian government blocked most of the Chinese investments in India. It has also banned more than 200 Chinese apps over the past three years.
The government and central bank have also expressed concern about China’s large stake in Paytm, a major player in India’s financial services sector. As revealed by Paytm to the market, this is one of the reasons why some approvals are pending.
“Paytm Payments Services Limited (PPSL) has continued to seek the necessary approvals from the Government of India for One97 Communications Ltd’s previous investments. in PPSL according to FDI guidelines. According to RBI’s letter dated March 23, PPSL may resume its online payment aggregation business, pending government approval,” the company said in its June quarter earnings release. This is the company’s payment gateway business that requires a payment aggregator license from the RBI. RBI has blocked Paytm PG from accepting new online merchants while it can continue to provide payment services to its existing online merchants.
According to the company, this has not had a significant impact on their business and revenue, as most of the large traders have been referred by one of the PG firms. Similarly, Paytm Payments Bank Limited, an affiliated company in which Sharma owns 51% of the shares and One97 owns the remainder, RBI has asked the company to stop accepting new customers. .
“PPBL implemented the various recommendations of the RBI as part of an IT review conducted earlier in fiscal year 2023. During the quarter, PPBL submitted a declaration of compliance to the RBI and this is currently being reviewed by the RBI. review,” the notice read.
