Vijay Shekhar Sharma, the renowned founder and CEO of Paytm, is making a significant move by acquiring a substantial stake in the listed fintech behemoth. He will secure 6.53 crore shares, translating to a 10.3% stake, from Antfin Holdings BV, an affiliate of China’s Ant Group, based in the Netherlands.
This off-market transaction entails the transfer of shares from Antfin to Resilient Asset Management, a holding company exclusively owned by Sharma. As per a regulatory filing by Paytm on Monday (August 7), the outcome of this deal will result in Mr. Sharma’s shareholding in Paytm, both directly and indirectly, rising to 19.42%. In contrast, Antfin’s shareholding will diminish to 13.5%.
This strategic maneuver not only reshuffles Paytm’s shareholder structure but also signifies a shift in Ant Group’s position as the largest shareholder. The move comes in the wake of the departure of Ant Group’s Senior Vice President, Douglas Feagin, from his role as a non-executive, non-independent director at Paytm in February.
This share transaction holds particular significance given the backdrop of tense geopolitical relations, with Chinese ownership in prominent Indian companies being a subject of debate. Following this sale, the Chinese holding in Paytm has been notably reduced.
In response to this news, Paytm’s shares surged 8% above their previous closing price on the BSE. Currently trading at INR 848.40 per share, this stake is estimated to be worth $628 million based on the closing price as of August 4.
It’s important to note that Vijay Shekhar Sharma will not be making any monetary payments to Antfin for the acquired stake. Instead, Resilient will gain ownership and voting rights over the 10.30% block, issuing optionally convertible debentures (OCDs) to Antfin. This innovative move ensures that the Netherlands-based holding company retains the economic value of the stake.
Vijay Shekhar Sharma expressed his pride in Paytm’s role in Indian financial innovation and its achievements in revolutionizing mobile payments and fostering financial inclusion. He also thanked Ant for their longstanding partnership.
Paytm has enjoyed a successful period recently, particularly in its lending business, which disbursed 4.3 million loans worth INR 5,194 crore in July 2023. Additionally, the company reported a 44.5% YoY decline in consolidated net loss at INR 358.4 crore for Q1 FY24, attributed to growth in its loan distribution and payments businesses.
This move by Vijay Shekhar Sharma underscores his commitment to further shaping the course of Paytm’s future as a leader in India’s fintech landscape.
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