Paytm's Vijay Shekhar Sharma to Buy 10.3% Stake; Stock Soars 11%
Paytm's CEO Vijay Shekhar Sharma is acquiring a 10.3% stake from Antfin, boosting his ownership to 19.42%, while Antfin's share drops to 13.5%. The deal, valued at $628 million, showcases Sharma's dedication without cash involvement. Paytm's management structure remains unchanged, reflecting Antfin's trust in Paytm's potential. This move led to an 11% increase in Paytm's shares, with the company reporting strong growth in users, merchant subscriptions, loans, and payment volumes, alongside reduced loss margin in Q1 FY2024.
Paytm's CEO to Strengthen Stake with 10.3% Acquisition from Antfin
Vijay Shekhar Sharma, the CEO of Paytm, is making a big move to secure a 10.3% ownership in the company, showing his strong commitment. This part of Paytm was previously owned by Antfin (Netherlands) Holding B.V., which is linked to Alibaba Group. The ownership will be shifted to a company owned by Sharma called Resilient Asset Management BV, based in the Netherlands. This move is expected to give Sharma more influence within Paytm and make his role in the company's future more solid.
To make this happen, Resilient Asset Management will issue papers to Antfin, worth $628 million based on the current value. This will allow Antfin to still have a financial interest in Paytm, but the voting rights and ownership will move to Resilient Asset Management, showing a big change in who owns the company.
This deal is different because it doesn't involve direct money transfers or promises from Sharma. This shows that Sharma really wants Paytm to grow and succeed.
A Paytm spokesperson said that this change won't change how the company is run. Paytm will still be managed professionally, and the people in charge of the company won't change because of Antfin's involvement.
Because of this change, the total amount of Paytm that Sharma owns will go up to 19.42%, and Antfin's ownership will go down to 13.5%.
This move is important because it shows that Antfin believes in Paytm's future success and also helps the relationship between Antfin and Paytm.
Sharma said, "I want to thank Ant for supporting us all these years," when talking about this change.
In the end, Paytm will continue to be a big player in the fintech world. Sharma's new ownership marks a new part of Paytm's story, showing its strength and future plans. The people in charge and how the company is managed won't change, and Paytm will stay important in the digital finance world.
When the news came out that Sharma wanted to get this part of Paytm, the company's shares went up by 11% in early trading on Monday. This move is expected to make Sharma own 19.42% of Paytm, and Antfin will own 13.5%. Because of this, Paytm's share price went up to ₹887.55 per share on the Bombay Stock Exchange (BSE).
Also, Paytm shared good news about how many people use their services. There was a 19% increase in users compared to last year, reaching 93 million people. Many businesses also joined Paytm, with 8.2 million businesses using it, and 4.1 million of them joined this year. In July 2023 alone, about 400,000 businesses joined.
In terms of loans, Paytm gave out a lot in July 2023, with 4.3 million loans and a total loan value of ₹51.94 billion for the month. This is a really big increase compared to last year. Also, the amount of money people paid using Paytm, called the Gross Merchandise Value (GMV), went up by 39% compared to last year, reaching ₹1.47 trillion.
Notably, Paytm's loss in the June quarter of FY2024 became smaller, going down to ₹3.584 billion.
All of this shows that Paytm is doing well and growing, which means it will probably do even better in the fintech world in the future.
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