Ant Group Ditches 3.6% Paytm Stake For INR 2,037 Cr

Chinese internet giant Ant Group offloaded a 3.6% stake in fintech giant Paytm on Friday (August 25) for INR 2,037 Cr through open market transactions.

Antfin (Netherlands) Holding B.V. sold 2.27 Cr shares of One97 Communications, the parent of Paytm, for INR 895.2 per share, as per bulk and block deal data of the BSE.

The subsidiary of the Ant Group sold the shares in 14 tranches. Shares of Paytm ended Friday’s trade 0.54% lower at INR 899.30 on the BSE.

Societe Generale, Morgan Stanley Asia Singapore Pte, Citigroup Global Markets Mauritius Private Ltd, BNP Paribas Arbitrage, Goldman Sachs (Singapore) Pte, Motilal Oswal Fund, and Nippon India Mutual Fund, among others, were the buyers of the offloaded Paytm shares.

Antfin (Netherlands) Holding held a 23.79% stake in Paytm at the end of the June 2023 quarter, which declined to 20.21% following Friday’s stake sale, as per Paytm’s shareholding data available with the BSE. 

Earlier this month, Antfin (Netherlands) Holding transferred 6.53 Cr Paytm shares, or 10.3% stake, to the fintech giant’s CEO and founder Vijay Shekhar Sharma’s Resilient Asset Management through an off-market transaction. 

While announcing the transaction, Paytm said it would reduce Antfin’s stake in the company to 13.5% and increase Sharma’s stake to 19.42%. 

The development comes at a time when the government has increased scrutiny of Chinese investments in Indian companies. The Ant Group is an affiliate of Jack Ma’s Alibaba Group.

In February this year, Ant Group’s senior vice-president Douglas Feagin resigned from the Paytm board. In the same month, Alibaba.Com Singapore E-Commerce Private Limited exited Paytm by selling a 3.31% stake.

Amid all these, shares of Paytm have been on an upswing this year due to the company’s improving financial performance and a change in investor sentiment towards new-age tech stocks.

Paytm’s net loss declined nearly 45% year-on-year to INR 358 Cr in the quarter ended June 2023. Operating revenue surged 39% to INR 2,342 Cr on strong growth in payments and lending business. 

A number of brokerages, including Goldman Sachs, Citi, and CLSA, gave a thumbs up to the company’s Q1 performance and a ‘BUY’ rating to the stock. They have also increased their target price. Shares of Paytm closed nearly 70% higher year to date on Friday.

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