Adani Group chairman, Gautam Adani, is likely considering acquiring a stake in Paytm’s parent company One97 Communications, reported The Times of India quoting sources familiar with the matter.
As per the report, Paytm founder and CEO Vijay Shekhar Sharma visited Adani at his office in Ahmedabad to “finalise the contours of a deal” on Tuesday.
However, Paytm has denied any such discussion in an exchange filing. Vijay Shekhar Sharma has no plans to sell personal stake in One97 Communications, reported ETNow quoting its sources.
Shares of Paytm’s parent co One97 Communications jumped 5% at open on BSE. It was trading at 359.55 rupees, up 4.99% at 9:21 am while BSE Sensex was dow 318 points.
If the said deal is successfully negotiated, it will signify the ports-to-airports conglomerate’s entry into the fintech industry, and it will position it against competitors like Google Pay, Walmart-owned PhonePe, and Mukesh Ambani’s Jio Financial.
Quoting the sources the report said that Adani and Sharma have been in talks for an extended period, with their recent meeting at Adani Corporate House in Ahmedabad on Tuesday focusing on “finalising the contours of the deal.”
The reported sources also mentioned that Adani is engaging with West Asian funds to attract them as investors in One 97, the company that pioneered mobile payments in India.
Vijay Shekhar Sharma holds approximately 19 percent of One 97 Communications, with his stake valued at Rs 4,218 crore based on the stock’s closing price of Rs 342 per share on Tuesday. He directly owns 9 percent of Paytm and another 10 percent through Resilient Asset Management, a foreign entity. According to One 97’s stock exchange filings, both Sharma and Resilient are classified as public shareholders.
Other major shareholders of One 97 include the private equity fund Saif Partners, holding 15%, Antfin Netherlands, founded by Jack Ma, with a 10% stake, and the company’s directors, who collectively own 9%.
Founded by Sharma in 2007, One 97’s IPO was the second largest in the country, and the company currently has a market capitalization of over Rs 21,000 crore.
The Paytm Odyssey
One 97 was initially a recharge platform which later transitioned its payment and merchant acquiring operations to Paytm Payments Bank (PPBL).
However, RBI barred Paytm Payments Bank Limited (PPBL) from accepting deposits, credit transactions or top-ups in any customer accounts, wallets, and FASTags, keeping in view the interest of customers, including merchants from March 15 onwards. The company shifted its focus to UPI payments, distribution, and merchant acceptance.
Earlier this month, One97 said its losses widened to Rs 550 crore. The company had posted a loss of Rs 167.5 crore in the same period a year ago, the company said in a regulatory filing.
“Our fourth quarter FY24 results were impacted by temporary disruption on account of UPI transition etc. and permanent disruption because of the PPBL embargo. Paytm reported a revenue of Rs 2,267 crore, a modest decline of 3 per cent Y-o-Y (year-on-year). Our contribution margin was 57 per cent including UPI incentives, and 51 per cent excluding UPI incentives,” Paytm said in a statement.
Paytm also warned of job cuts and said it would trim non-core assets after reporting its first sales decline on record, reflecting fallout from a regulatory probe.
