Paytm founder and CEO Vijay Shekhar Sharma will acquire a 10.3% stake worth $628 million in the fintech company from an arm of Chinese fintech major Ant Financial. One should note that Vijay Shekhar Sharma founded Paytm in August 2010, and with the acquisition of this 10.3% stake he will become the single largest shareholder in the company. Meanwhile, Antfin will cease to be the largest shareholder in Paytm after the deal.
The move comes as Sharma, who also serves as Paytm's chief executive, looks to simplify the firm’s ownership structure in the backdrop of concerns related to Chinese ownership in Indian financial technology companies, said a Reuters report quoting analysts.
After the purchase of this additional 10.3% stake, Sharma will now become the largest shareholder in the digital payments company with a holding of 19.42%.
The stake that Sharma is buying from Antfin (Netherlands) Holding B.V. will reduce the Chinese firm's ownership in the firm to 13.5%. The Paytm founder will not pay in cash for the stake, but instead, an entity owned by Sharma will issue convertible debentures to Antfin.
On Monday, in an exchange filing the company said, “Vijay Shekhar Sharma (Founder, Managing Director and CEO of the Company), and Antfin (Netherlands) Holding B.V. (Antfin), have entered into an agreement on August 07, 2023 whereby Antfin will transfer 65,335,101 shares of the Company to an entity 100% owned by Mr. Sharma – Resilient Asset Management B.V. (Transaction). This implies a transfer of 10.30% of the share capital of the Company.”
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The company said that Sharma will buy 10.30% shareholding in Paytm from Antfin, via his 100% owned overseas entity – Resilient Asset Management B.V.
On closing of this transaction, Sharma’s shareholding in Paytm (direct and indirect) will increase to 19.42%, whereas Antfin’s shareholding will reduce to 13.5%. Based on the closing price as on August 04, 2023, the value of the 10.30% stake amounts to $628 million.
Commenting on this development, Vijay Shekhar Sharma said, “I am proud of Paytm's role as a true champion of made-in-India financial innovation, and our achievements in revolutionizing mobile payments and contributing to formal financial services inclusion in the country.”
Today, the share price of Paytm which trades as One 97 Communications Ltd on NSE was up 6.79% at Rs 850.70 per share.