Vijay Shekhar Sharma to buy 10.30% stake in Paytm from Antfin

Vijay Shekhar Sharma, Founder, MD, and CEO of One97 Communications, which operates payments platform Paytm, has entered into an agreement with Antfin (Netherlands) Holdings, a subsidiary of China's Ant Group, to purchase a 10.3% stake in Paytm.

The development will make Sharma the largest shareholder of the fintech firm with 19.42% shareholding, replacing Antfin whose ownership post transaction now stands at 13.5%. 

Antfin will transfer 6.53 crore shares of Paytm to Resilient Asset Management, the overseas entity based out in Netherlands in which Sharma holds 100% stake.

Based on the closing price on August 4, the value of the 10.3% stake amounts to $628 million, the company said in an exchange filing. 

“I am proud of Paytm's role as a true champion of Made-in-India financial innovation and our achievements in revolutionising 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,” the founder said in a statement. 

Antfin will be issued Optionally Convertible Debentures (OCDs) by Resilient Asset Management in consideration for the transfer and to retain economic value, a statement from Paytm said.

OCDs are debt securities, which allow an issuer to raise capital and in return, the issuer pays interest to the investor till the maturity.

The new ownership structure will likely benefit the company, Paytm further claimed. 

There will be no cash payment made for this acquisition and neither will any pledge, guarantee, or other value assurance be provided by Sharma, directly or otherwise, the filing said. 

“Pursuant to the transaction, there would be no change in the management or control of Paytm, since Sharma would continue as Managing Director and CEO, and the existing Board would continue as is. Further, there is no nominee of Antfin on the Board of Paytm,” it added. 

Following the development, Paytm shares jumped 11.57% to hit a high of Rs 887.55 on the BSE on Monday.