New Delhi :
In a pivotal development for the financial technology sector, Vijay Shekhar Sharma, the Founder and CEO of One97 Communications, the parent company of Paytm, is set to secure the largest ownership stake within the organization.
This shift in ownership dynamics comes as a result of a strategic agreement inked with Antfin on August 7, in which Vijay Shekhar Sharma will acquire a significant 10.3% stake from Antfin.
The market has responded with enthusiasm to this news, propelling Paytm’s shares to a remarkable 12% increase in intra-day trading, reaching a peak of Rs 887.55 on the BSE.
Although the price experienced a slight moderation due to profit booking, the day concluded with Paytm’s share price at Rs 850.75, reflecting a substantial 6.95% gain.
Vijay Shekhar Sharma’s Enhanced Stake
With the agreement’s terms stipulating that Resilient Asset Management BV, an overseas entity owned completely by Vijay Shekhar Sharma, will acquire the 10.3% stake, a significant transformation in ownership unfolds. Post-transaction, Vijay Shekhar Sharma’s stake in Paytm will stand at 19.42%, while Antfin’s share will diminish to 13.5%. Importantly, this deal will be executed outside the open market.
Innovative Deal Structure Reflecting Confidence
Unlike a traditional cash payment, this deal harnesses the issuance of Optionally Convertible Debentures (OCDs) by Resilient to Antfin.
This approach not only transfers ownership and voting rights to Resilient but also signifies Antfin’s unwavering faith in Paytm’s future growth trajectory.
Notably, Vijay Shekhar Sharma will not extend any pledges, guarantees, or value assurances for this transaction.
Based on the closing price of August 4, the 10.3% stake’s value rests at approximately $628 million.
Antfin’s Strategic Moves
The recent agreement marks another significant transition in Paytm’s ownership landscape, following Alibaba Group’s sale of its remaining stake earlier this year. Antfin, an entity of the Alibaba Group, is actively reducing its shareholding within Paytm.
Additionally, other stakeholders, including SoftBank, have been gradually divesting their shares through open market transactions in recent months.
In July, SoftBank garnered $200 million through such a share sale.
As Paytm’s ownership narrative evolves, the financial technology giant continues to draw attention for its strategic maneuvers, underlining its prominence in the fintech sector.