Ant Group made a significant move on Friday (August 25) by divesting a 3.6% stake in fintech giant Paytm. The transaction, valued at INR 2,037 Cr, took place through open market dealings.
Paytm Details of the Sale
Antfin (Netherlands) Holding B.V., a subsidiary of Ant Group, executed the sale by offloading 2.27 Cr shares of One97 Communications, the parent company of Paytm. The shares were sold at INR 895.2 per share, spread across 14 different transactions, according to data from the BSE.
Impact on Paytm’s Share Value
Following the stake sale, shares of Paytm faced a slight dip, closing 0.54% lower at INR 899.30 on the BSE.
Buyers of Offloaded Shares
A range of prominent buyers snapped up the shares that were sold off. Notable among them were Societe Generale, Morgan Stanley Asia Singapore Pte, Citigroup Global Markets Mauritius Private Ltd, BNP Paribas Arbitrage, Goldman Sachs (Singapore) Pte, Motilal Oswal Fund, and Nippon India Mutual Fund.
Paytm Change in Stakeholding and Background
Antfin (Netherlands) Holding’s stake in Paytm reduced from 23.79% to 20.21% due to this stake sale. This comes on the heels of an earlier transaction this month where 10.3% stake was transferred to Paytm’s CEO and founder Vijay Shekhar Sharma’s Resilient Asset Management. Paytm announced that this move aimed to decrease Antfin’s stake to 13.5% while boosting Sharma’s stake to 19.42%.
The backdrop of this development involves heightened scrutiny by the Indian government on Chinese investments in Indian companies. It’s important to note that the Ant Group has affiliations with Jack Ma’s Alibaba Group. Additionally, Paytm’s shares have been on the rise this year due to improved financial performance and changing investor sentiment towards technology stocks.
In the quarter ending June 2023, Paytm exhibited a 45% decrease in net losses compared to the previous year, amounting to INR 358 Cr. On the revenue front, the company witnessed a 39% surge, reaching INR 2,342 Cr. This growth was fueled by strong performance in the payments and lending sectors. Including Goldman Sachs, Citi, and CLSA, commended Paytm’s Q1 performance and assigned a ‘BUY’ rating to the stock. With a nearly 70% year-to-date increase, Paytm’s shares closed higher on Friday.
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