Ant Financial plans to sell 3.6% stake in Paytm via block deal

Paytm shareholder Ant Financial is set to further reduce its holdings in payments company Paytm, as it plans to sell 3.6% stake through a block deal, Bloomberg has reported.

The floor price for the deal is likely to be at a discount of Rs 880.10 per share. Paytm shares rose 1.7% on August 25 on the BSE.

Earlier this month, the company said Vijay Shekhar Sarma, Founder and CEO of One97 Communications, the parent entity of Paytm, had entered into an agreement where Sharma would purchase a 10.3% stake in Paytm. This will increase Sharma's holdings to 19.42% and reduce Antfin's stake to 13.5%.

China ecommerce giant Alibaba Group's fintech arm Antfin plans to sell approximately 2.3 crore shares at Rs 880.1 apiece, representing a marginal discount of 2.6% from the current market price. As of June 2023, Antfin had a 23.79% stake in Paytm.

Other investors have also been steadily reducing stake in Paytm. SoftBank has reportedly generated $200 million in the past few months via share sales.

Paytm's revenue grew at a compound annual growth rate of 69% from Rs 2,802 crore in FY21 to Rs 7,990 crore in FY23, with payment accounting for 62% and both financial services and commerce and cloud services accounting for 19% each. Revenue from payment services grew 44% to Rs 4,930 crore in FY23 from Rs 3,432 crore in FY22.

The company reported significant improvement in payment contribution margins, growth in high-margin financial services, and increased margins in commerce and cloud services.

Notably, Paytm achieved an operating breakeven (EBITDA before ESOP cost) ahead of the previously shared guidance of September 2023.