Jack Ma-backed Ant Group plans to pare stake in Paytm

Jack Ma-backed Ant Group plans to pare stake in Paytm

As of December, Ant owned 24.86% of One 97, but after the share repurchase, its ownership increased to beyond 25%, according to one of the sources

FPJ Web DeskUpdated: Saturday, February 25, 2023, 01:31 PM IST
article-image
Jack Ma-backed Ant Group plans to pare stake in Paytm | Image: Wikipedia

Ant Group Co. is considering selling a portion of its holdings in Paytm's operator in order to maintain its holdings below a necessary threshold, according to people familiar with the situation, as per a report by Bloomberg.

When One 97 Communications Ltd.'s share percentage climbed passively as a result of share buybacks, the Chinese fintech behemoth has been debating alternatives to lower its investment in the company, according to the people, who asked to remain anonymous because the conversation is private.

Discussions in early stages

According to the sources, discussions are in their early stages, and specifics may change in response to regulatory and pricing issues. Email efforts for comment from Ant did not immediately receive a response. Paytm decided to comment on the matter.

Alibaba Group Holding

The discussions come after Alibaba Group Holding Ltd., an unit of Ant, sold its Paytm share as the e-commerce behemoth reduced its investments there due to rising geopolitical tensions.

The people said that the sale of Ant would be for technical factors rather than political ones.

As of December, Ant owned 24.86% of One 97, but after the share repurchase, its ownership increased to beyond 25%, according to one of the sources.

After the buyout is finished on February 13th, Ant will have a 90-day opportunity to reduce its stake. In December, One 97 announced a buyback of up to 8.5 billion rupees ($100 million).

Ant Group and Sunil Mittal

As Ant intends to back off, Indian telecom mogul Sunil Mittal is reportedly looking to acquire a share in Paytm by combining his financial services business with the payments bank of the fintech company.

According to the people, who asked to remain anonymous because they were sharing private information, Mittal wants to merge Airtel Payments Bank with Paytm Payments Bank through a stock deal and also buy Paytm shares from other shareholders. Airtel and Paytm may not achieve an agreement at this point in the negotiations, the people said.

To create a network of payment services across Asia, Ant has invested in 10 fintech wallets outside of mainland China.

Ant is seeking approval to submit an application for a financial holding company licence in China, which would allow it to continue its fintech operations. Regulators recently let the company's subsidiary in consumer lending to boost capital, which is a sign of improvement.

In the midst of a larger retreat, billionaire Jack Ma, who has generally avoided the spotlight, has declared he will relinquish management of Ant, while he still owns stock in the company.

RECENT STORIES

India Eases Onion Export Restrictions To UAE And Bangladesh Through NCEL

India Eases Onion Export Restrictions To UAE And Bangladesh Through NCEL

Ullu: Adult Video Streaming OTT Platform Under NCPCR Scrutiny Over Explicit Content Ahead Of IPO

Ullu: Adult Video Streaming OTT Platform Under NCPCR Scrutiny Over Explicit Content Ahead Of IPO

After US Markets, Tech Boom Nudges Japan's Nikkei 225 To 40,000 For The First Time

After US Markets, Tech Boom Nudges Japan's Nikkei 225 To 40,000 For The First Time

Global Rating Agency Moody's Raises India's 2024 Growth Forecast To 6.8%

Global Rating Agency Moody's Raises India's 2024 Growth Forecast To 6.8%

Stock Market Opening March 4: Indices In Green; Sensex At 73,920.60 & Nifty At 22,409.80

Stock Market Opening March 4: Indices In Green; Sensex At 73,920.60 & Nifty At 22,409.80