Alibaba's Antfin transfers 10.3% stake in Paytm; Sharma now biggest shareholder

Shares of One 97 Communications Ltd, the parent company of Paytm Ltd, are trading in red in the opening trade today after Chinese e-commerce giant Alibaba Group subsidiary Antfin transferred its 10.3% stake in the fintech company to its founder and chief executive Vijay Shekhar Sharma.

"Antfin (Netherlands) Holding B.V., one of the shareholders of One 97 Communication, hereby file the disclosure in the format prescribed under Regulation 29(2) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, with respect to disposal of 65,335,101 equity shares of the company, resulting into change in shareholding of more than 2% of the total equity share capital of the company," a regulatory filing shows.

The current offloading of stake by Antfin will make the Paytm-parent majorly-owned Indian company, with the Sharma family holding the biggest stake at 19.55%. Even after this deal, Antfin's stake in One97 will remain at 13.5%.

Paytm says the total share capital, including diluted or voting capital for the quarter that ended June 30, 2023, stands at ₹634,178,681.

"Subsequently, the total share capital of the TC has increased to ₹634,321,371 pursuant to allotment of 51,619 equity shares on July 06, 2023, and 91,071 equity shares on August 02, 2023, respectively upon the exercise of options under employee stock option scheme."

Early today, Paytm shares opened 0.14% lower at ₹877.75 against the previous closing price of ₹874.45 on the BSE. At the current share price, the market capitalisation of Paytm remains at ₹55,262 crore. Paytm share price touched a 52-week high of ₹915 on June 19, 2023, and a 52-week low of ₹439.60 on November 24, 2022.

Paytm had announced about Sharma entering into an agreement to pick up 10.30% stake in Paytm from Antfin via his 100% owned overseas entity, Resilient Asset Management B.V, on August 7, 2023.

“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 my sincere gratitude to Ant for their unwavering support and partnership over the past several years,” Sharma said.

As per the agreement, Antfin will be issued Optionally Convertible Debentures (OCDs) by Resilient Asset Management B.V. in consideration of the transfer of ownership and voting rights. This will allow Antfin to retain the economic value of its 10.30% stake in Paytm.

“Accordingly, no cash payment will be made for this acquisition, and neither will any pledge, guarantee, or other value assurance be provided by Sharma, directly or otherwise,” the company says.

Following this transaction, there will be no change in the management or control of Paytm as Sharma would continue as managing director and CEO, along with the existing board members. However, there will be no nominee of Antfin on the board of Paytm.

For the April-June quarter of FY24, Paytm reported a consolidated net loss of ₹357 crore compared to a loss of ₹644 crore in the corresponding period last year and ₹168 crore in the March quarter (Q4 FY23). The consolidated revenue jumped 39.4% to ₹2,341 crore in Q1 FY24, from ₹1,679 crore in the year-ago period.