Paytm founder Vijay Shekhar Sharma will acquire a 10.3% stake from China’s Ant Group Co., in an unusual transaction that will make the entrepreneur the company’s single biggest shareholder without paying any cash.
The deal reduces a large overhang on the market as investors bet Ant, the Chinese fintech pioneer backed by billionaire Jack Ma, will eventually offload a chunk of its Paytm shares. By taking control, Sharma also addresses local concerns that a prominent company from a geopolitical rival runs one of India’s best-known tech firms. Paytm’s shares surged as much as 11% Monday, building on a 50% rally in 2023.
Sharma, chief executive officer of Paytm-parent One97 Communications Ltd., will increase his holding in the company to 19.42% while Ant’s drops to 13.5%, according to a regulatory filing. But the CEO won’t pay any cash and Ant instead gets convertible securities that will give it the option to recoup its economic stake in future, and potentially benefit if Paytm’s value rises. The company didn’t specify a timeframe and representatives declined to elaborate.
Read the full story on Bloomberg here.