Paytm founder Sharma tightens grip on payments firm

Paytm founder Vijay Shekhar Sharma has acquired a 10.3% stake worth about $630 million from China’s Ant Group without paying any cash in a deal that makes the payment firm’s boss the largest shareholder in the company.

With this off-market deal, the holdings of Sharma, the managing director and chief executive of the payment firm, will jump to 19.42%, while Antfin’s shareholding will decline to 13.5%.

Shares of One97 Communications Ltd rallied about 11.5% on BSE in intraday trading following the news of the share transfer before closing 6.95% up at ₹850.75 on Monday.

Sharma will take over Antfin’s 10.3% stake in Paytm through Resilient Asset Management B.V., his entity based in the Netherlands, which will issue optionally convertible securities in return. 

Optionally convertible securities give the holder the option to convert these into shares at a later date, or to retain them as debentures, depending on the investor’s choice.

As per the agreement executed between the parties, Resilient will acquire ownership as well as voting rights of the 10.30% block. 

There will be no change in the management or control of Paytm as Sharma will continue as managing director and CEO, and the existing board will continue as is, the company said. 

“Paytm remains a professionally managed company with no identifiable promoter. Further, there is no nominee of Antfin on the board of Paytm,” it added.

“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,” Sharma said.

The deal comes as a relief for Sharma, who by taking control of a significant stake in Paytm has laid to rest concerns of the firm being run by one of the biggest companies based out of China.

The company’s payment services licence had been pending regulatory approval for over six months amid apprehensions over its Chinese ownership.