Mutual Funds Continue To Increase Stake In Paytm; FIIs Sell Further In June Quarter

Indian mutual funds further increased their stake in fintech giant Paytm in the June quarter of FY25, while the share of foreign institutional investors (FIIs) in the company continued to decline.

As per the BSE data, the total shareholding of domestic mutual funds in the company increased to 6.8% at the end of June quarter from 6.15% at the end of the March quarter of FY24. This was led by an increase in stakes of Mirae Mutual Fund and Nippon India Mutual Fund. 

While Nippon increased its stake in Paytm to 1.76% from 1.66% earlier, Mirae Mutual Fund increased its stake in the company to 3.92% from 3.76% in the previous quarter.

It is pertinent to note that amid a regulatory crisis following the Reserve Bank of India’s clampdown on Paytm Payments Bank earlier this year, domestic mutual funds increased their stake in Paytm to 6.15% in the March quarter from 4.99% at the end of the preceding December quarter. Compared to this, the quarter-on-quarter (QoQ) jump was lower in Q1 FY25.

Meanwhile, Indian retail investors increased their stake in the fintech giant to 16.56% during the June quarter from 15.32% at the end of the March quarter. Ace investor Akash Bhanshali held 1.21% stake in the company at the end of the June quarter. 

The stake held by Non-Resident Indians (NRIs) declined marginally to 0.81% during the June quarter from 0.85% at the end of the preceding quarter.

Overall, domestic institutional investors’ (DII) stake in the Vijay Shekhar Sharma-led company increased to 7.15% in the June quarter from 6.86% in the preceding March quarter.

Amid significant selling by FIIs in the Indian equity market in April and May due to Lok Sabha elections-related uncertainties, the total foreign direct investment (FDIs) in Paytm declined by 200 basis points during the June quarter.

FDI in Paytm stood at 37.77% at the end of June quarter versus 39.77% at the end of Q4 FY24. SoftBank’s SVF India Holdings (Cayman) Limited now holds below 1% stake in the company.

The stake held by foreign portfolio investors (FPIs) in the fintech major also came down to 20.48% in Q1 FY25 from 20.64% at the end of the preceding March quarter, as per the shareholding pattern. 

Among the FPIs, Goldman Sachs (Singapore) Pte’s stake fell below 1%. The fund sold 44.2 Lakh shares in the company worth INR 183.4 Cr in a bulk deal last month. Treeline and UBS Principal Capital Asia expanded their shareholding to more than 1% in the June quarter.

After a significant selling in the stock since the beginning of February this year, Paytm has been witnessing some revival since June. Overall, the stock gained 16% in the June quarter and closed today’s trading session at INR 467.25 on the BSE.

Paytm is scheduled to report its June quarter earnings results on July 19. In Q4 FY24, its net loss widened over 3X year-on-year (YoY) to INR 550.5 Cr. Operating revenue fell 2.9% YoY to INR 2,267.10 Cr.