In a strategic move that reshapes the ownership structure of India’s leading digital payments firm, Paytm founder Vijay Shekhar Sharma has purchased a 10.30% stake in the company from Antfin (Netherlands) Holding BV, according to a BSE filing.
The deal involves the transfer of 6.53 crore shares of Paytm from Antfin to an entity entirely owned by Vijay Shekhar Sharma – Resilient Asset Management B.V. With this acquisition, Sharma’s holding in the company will increase to 19.42%, while Antfin’s stake will decrease to 13.5%. As a result, Antfin, an affiliate of China’s Ant Group Co, will no longer retain the position of the largest shareholder in Paytm.
In a statement released on Monday, Paytm’s parent company, One97 Communications, expressed that the transaction would facilitate a smooth transfer of 10.30% of Paytm’s share capital to Sharma’s Resilient Asset Management. The filing also clarified that the acquisition involved no cash payment and neither did it involve any pledge, guarantee, or value assurance by Sharma.
Following the announcement, Paytm’s share price surged by over 11% in early trade on Monday, reaching ₹887.55 apiece on the BSE. This bullish reaction reflects investor optimism about the new ownership structure and its potential impact on the company’s growth trajectory.
In response to the deal, Vijay Shekhar Sharma expressed his pride in Paytm’s role as a pioneer of made-in-India financial innovation. He lauded the company’s achievements in revolutionizing mobile payments and contributing to the inclusion of formal financial services in the country. Sharma also extended his gratitude to Ant for their unwavering support and partnership over the years.
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. As we announce this transfer of ownership, I would like to express… https://t.co/poNwQIHs7Y
— Vijay Shekhar Sharma (@vijayshekhar) August 7, 2023
The transaction involves the issuance of Optionally Convertible Debentures (OCDs) to Antfin by Resilient Asset Management, allowing Antfin to retain economic value. OCDs are debt securities that enable an issuer to raise capital while providing interest payments to the investor until maturity.
Paytm asserted that the new ownership structure would be advantageous for the company. Importantly, there will be no change in management or control, with Sharma continuing as Managing Director and CEO, and the existing Board remaining unchanged. Furthermore, no nominee of Antfin will serve on Paytm’s Board.
Recently, Paytm reported a surge in its average monthly users, which rose by 19% year-on-year to 9.3 crore. The company’s merchant subscriptions reached 82 lakhs, with 41 lakh new subscriptions over the year. Sequentially, the company saw merchant subscriptions increase by approximately 4 lakh in July 2023.
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In addition, Paytm claimed to have provided 43 lakh loans in July, amounting to a total value of ₹5,194 crore, representing a remarkable yearly growth of 148%. The payment volumes for merchants or Gross Merchandise Values (GMV) also witnessed a substantial rise of 39% year-on-year at ₹1.47 lakh crore.
In its June quarter for FY2024, the fintech platform reported a narrowing of loss to ₹358.4 crore, reflecting promising financial performance amid the changing landscape of digital payments in India.
The acquisition of the additional stake by Vijay Shekhar Sharma marks a significant milestone in Paytm’s journey, providing the company with increased momentum and reinforcing its position as a leader in the Indian fintech market. As Paytm continues to innovate and expand its offerings, all eyes will be on how the reshaped ownership structure influences its future growth and strategic direction.
