Vijay Shekhar Sharma, founder and CEO of fintech firm One97 Communications, plans to acquire a 10.30% stake in Paytm from Antfin (Netherlands) Holding BV without incurring any cash costs through an off-market transfer transaction.
This acquisition will transform One97 Communications, operating under the Paytm brand, from being predominantly Chinese-owned to predominantly Indian ownership. Although Vijay Shekhar Sharma will become its largest shareholder at 19.42%, Antfin will retain the economic rights of their stake being transferred.
Sharma will purchase Antfin’s 10.3% shareholding in Paytm through Resilient Asset Management BV, thus decreasing their stake from 23.8% to 13.5% in Paytm.
Paytm’s management or control will remain unchanged with this transaction; Vijay Shekhar Sharma will continue as MD/CEO while its board remains intact; Antfin will have no nominee sitting on Paytm’s board of directors.
Paytm’s acquisition by Antfin was seen as a positive development, as it rid them of an overhang in terms of shares being offloaded in the market by them and ensures compliance with the regulatory threshold of 25% SAST (Substantial Acquisition of Shares and Takeovers) for change of control.
Antfin’s transaction price was approximately Rs795 per share, considerably less than Paytm’s initial public offering (IPO) listing price of Rs2,150 each. It serves as proof of Vijay Shekhar Sharma’s dedication and should have positive effects on Paytm Payment Services Limited’s (PPSL) fundamentals as well as alleviate concerns raised by RBI when they rejected its application to operate as an aggregator, asking it reapplies with full compliance of Foreign Direct Investment guidelines (FDI).
