SUMMARY
The transaction will see the transfer of the shares from Antfin to Resilient Asset Management, a holding company fully owned by Vijay Shekhar Sharma
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%
Resilient will acquire ownership and voting rights of the 10.30% block, and will issue optionally convertible debentures (OCDs) to Antfin, without any cash consideration
Vijay Shekhar Sharma, the founder and CEO of paytm
, will acquire 6.53 Cr shares amounting to a 10.3% stake in the listed fintech giant from the Netherlands-based Antfin Holdings BV, an affiliate of China’s Ant Group.
The off-market transaction will see the transfer of the shares from Antfin to Resilient Asset Management, a holding company fully owned by Sharma. “On closing of this transaction, Mr Sharma’s shareholding in Paytm (direct and indirect) will increase to 19.42%, whereas Antfin’s shareholding will reduce to 13.5%,” said Paytm in a regulatory filing on Monday (August 7).
The transaction will mean that Ant Group will not remain Paytm’s largest shareholder, making Sharma the largest shareholder in the company. The move comes after Ant Group’s senior vice president Douglas Feagin stepped down from his position as a non-executive, non-independent director of Paytm this February.
The share sale also means that Chinese holding – a point of contention in recent years as the geopolitical situation remains tense – in the storied fintech giant has reduced.
Off the back of the news, the fintech’s shares opened 8% higher than the previous close on the BSE. Currently, the shares are trading at INR 848.40 apiece. Based on the closing price as on August 4, the stake is worth $628 Mn.
However, the Paytm CEO will not be making any cash payments to Antfin for the stake. Resilient will acquire ownership and voting rights of the 10.30% block, and will issue optionally convertible debentures (OCDs) to Antfin. The move will allow the Netherlands-based holding company to retain the economic value of the 10.30% stake.
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 revolutionising mobile payments and contributing to formal financial services inclusion in 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 past several years.”
The fintech giant has had a stellar few months recently. Paytm’s lending business continues to make significant strides, as the company disbursed 43 Lakh loans worth INR 5,194 Cr in July 2023.
The fintech recently unveiled two new variants of its popular soundbox device at an event which saw the CEO pitch for a production-linked incentive (PLI) scheme for the local production of payments devices.
Most importantly, Paytm reported a 44.5% year-on-year (YoY) decline in its consolidated net loss at INR 358.4 Cr in the June quarter (Q1) of the financial year 2023-24 (FY24). Helped by the growth in the loan distribution and payments business, the fintech player’s operating revenue jumped 39% to INR 2,342 Cr in Q1 FY24 from INR 1,680 Cr reported in Q1 FY23.
