Paytm Secures Full Independence as antfin Exits in ₹3,800 Crore Block Deal

New Delhi, August 5, 2024 – Paytm’s parent company, One 97 Communications, has achieved full independence from Chinese ownership following a significant block deal today.Antfin (Netherlands) Holding B.V., the last remaining Chinese shareholder, exited its stake in Paytm for approximately ₹3,800 crore (roughly $457 million USD based on current exchange rates).This marks a pivotal moment for the Indian fintech giant, removing a long-standing overhang for investors and potentially paving the way for regulatory approvals.

Details of the Transaction:

Societe Generale purchased 72 crore Paytm shares at ₹1,067.50 per share, a premium to the floor price of ₹1,020. The floor price represented a 5.4% discount to Paytm’s closing price on Monday. A separate bulk deal saw My Asian Opportunities Master Fund LP acquire 35 lakh shares, valued at ₹374 crore, also at ₹1,067.50 per share.

paytm shares experienced a 2.3% decline today, closing at ₹1,053 on the National Stock Exchange (NSE).Context: A Shift in Paytm’s Ownership landscape

Antfin’s exit concludes a near-complete turnover of Paytm’s pre-Initial Public Offering (IPO) shareholder base. Over the past two years, major early investors including Alibaba Group Holding, SoftBank Vision Fund, and Berkshire Hathaway have fully divested their holdings. currently, Elevation Capital (formerly SAIF Partners) remains the only significant pre-IPO investor, holding a 15.4% stake as of June 2024.

Analyst Perspective & Regulatory Implications

According to Sachin Dixit,an analyst at JM Financial,the removal of Antfin’s ownership is likely to be viewed positively by the market. “With the long-standing overhang from a major Chinese investor now removed, Paytm’s stock could see a positive reaction as ownership concerns ease and supply pressure decreases,” Dixit stated.He further noted that the exit clarifies the company’s cap table and aligns it with regulatory expectations, potentially accelerating the approval process for Paytm’s pending request for a payment aggregator license. The Reserve Bank of India (RBI) has been scrutinizing Paytm’s operations and ownership structure closely.

Recent Financial Performance

One 97 Communications reported a turnaround in profitability for the first quarter of fiscal year 2026 (Q1FY26), posting a consolidated net profit of ₹122.5 crore, a significant improvement from the ₹839 crore loss reported in the same quarter last year. revenue from operations increased by 28% year-over-year,reaching ₹1,917 crore,compared to ₹1,502 crore in Q1FY25.The company had previously reported a net loss of ₹540 crore in the fourth quarter of fiscal year 2025 (Q4FY25).

Disclaimer: the views and opinions expressed by experts are their own and do not reflect the opinions of the Economic Times.

Additional Notes & details Not Explicitly in Original Article:

Antfin’s Original Stake: Antfin initially held approximately 30% of Paytm before the IPO. Exchange Rate: The conversion rate used for the USD equivalent (₹83.26 per $1 USD) is as of august 5, 2024.
Payment Aggregator License: The payment aggregator license is crucial for Paytm to continue offering payment processing services to merchants.
RBI Scrutiny: The RBI has been increasing scrutiny of fintech companies with foreign ownership, particularly those with ties to China, due to national security concerns.