Paytm’s Sharma to buy Ant’s 10.3% stake in company

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NEW DELHI: Paytm founder and CEO Vijay Shekhar Sharma will purchase a ten.3% stake (value $628 million) within the fintech agency from China’s Ant Monetary (often called Ant Group now) in a no-cash deal. This paves the way in which for Sharma and promoter entities to grow to be the biggest shareholders of the corporate. After the completion of the transaction, Sharma’s holding in Paytm will improve to 19.4%, whereas Ant Monetary’s shareholding will scale back to 13.5%.

The transfer is being seen as an try by the fintech main to cut back Chinese language possession within the agency at a time when Indian firms with Chinese language holdings are more and more coming below scrutiny of regulators.
“Each RBI and Sebi are very clear about the truth that they won’t enable entities with massive Chinese language possession to take part within the monetary providers business within the nation. As long as a big Chinese language overhang exists for Paytm, they won’t be able to get related licences to increase their enterprise. There are clearly implications to its enterprise mannequin and therefore this association has been arrived at,” mentioned an investor on situation of anonymity, including that it’s but to be seen if the transfer softens the stance of regulators. “It doesn’t appear to be like a typical buyout. On this case, the financial rights belong with somebody and the possession with another person. We should see the way it pans out,” the investor mentioned.


Consultants recommended that ultimately Paytm may favor Ant Monetary to totally exit the agency.”Ant Monetary can’t divest 13.5% at one shot. I believe it would occur in a section method,” mentioned an analyst.
Following the event, the share value of One97 Communications, which owns Paytm, ended at Rs 851 apiece on BSE, up 7%.
Sharma will purchase the stake by means of Netherlands-based Resilient Asset Administration, B.V., an entity totally owned by him by means of an off-market switch, Paytm guardian One97 Communications mentioned in a inventory alternate submitting. Ant Monetary is taking part within the transaction by means of its affiliate Antfin (Netherlands) Holding B.V.
“Underneath the settlement executed between events, Resilient will purchase possession, and voting rights, of the ten.3% block. In consideration for acquisition of the ten.30% stake, Resilient will subject optionally convertible debentures (OCDs) to Antfin, which, in flip, will enable Antfin to retain financial worth of 10.3% stake….accordingly, no money cost will likely be made for this acquisition, and neither will any pledge, assure, or different worth assurance be supplied by Sharma,” the corporate mentioned.

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