Paytm arm to sell stake in Japan’s PayPay to SoftBank for ₹2,364 cr

Paytm’s parent company One 97 Communications Limited’s (OCL) wholly-owned subsidiary One97 Communications Singapore Pvt Ltd. (Paytm Singapore) has approved the sale of stock acquisition rights (SARs) in Japan-based PayPay Corporation for ₹2,634 crore to SoftBank Vision Fund 2, the fintech company said in a release.

“The Board of Directors at its meeting held on December 06, 2024, has approved the sale of all its Stock Acquisition Rights in PayPay Corporation, Japan, to SoftBank Vision Fund 2 entity for net proceeds of JPY(Japanese Yen) 41.9 billion (equivalent to ₹2,364 crore),” an exchange filing says.

The company says the proceeds from the stake sale will strengthen One97’s consolidated cash reserves, enabling future investments and value creation for shareholders.

Notably, SARs allow holders to benefit from the increase in the value of the company's shares without owning them.

The deal values PayPay at JPY1.06 trillion, with Paytm Singapore’s SARs reflecting net proceeds after deducting the exercise cost. The transaction is anticipated to be closed in December 2024, subject to corporate approvals and customary closing conditions.

"We are grateful to Masayoshi-san and the PayPay team for giving us the opportunity to together create a mobile payment revolution in Japan. We remain fully committed and will continue to support PayPay's product and technology innovations in future. We are working on introducing new AI-powered features to accelerate PayPay’s vision in Japan," says a Paytm Singapore spokesperson.

Paytm reported a net profit of ₹930 crore for the quarter ending September 2024 compared to the net loss of ₹290.5 crore during the same period last year. The one-time gain of ₹1,345 crore from the sale of its movie ticketing business to Zomato contributed to the company’s net profit. Revenue stood at ₹1,659.50 crore, marking a 34.1% decline year-on-year.