Ant Group May Sell Some Shares in Paytm Operator to Meet Required Threshold
Ant Group, the Chinese fintech giant, is reportedly in talks to sell some of its shares in One 97 Communications Ltd., the operator of Indian financial technology firm Paytm. The move comes after Ant’s share percentage in the company rose passively due to share buybacks.
Ant is considering reducing its stake to keep it within a required threshold, according to sources familiar with the matter. The talks are preliminary, and details could change depending on regulatory and pricing concerns. While Ant’s deliberations follow Alibaba Group Holding Ltd.’s sale of its stake in Paytm, the sources say Ant’s sale would be for technical and not political reasons.
Ant held 24.86% of One 97 as of December, but its holdings rose above 25% after the repurchase reduced the number of shares outstanding. Ant has a 90-day window to cut its stake after the completion of the buyback on Feb. 13, according to the sources.
Meanwhile, Indian telecommunications tycoon Sunil Mittal is reportedly seeking a stake in Paytm by merging his financial services unit into Paytm Payments Bank. Mittal seeks to fold Airtel Payments Bank into Paytm Payments Bank in a stocks deal and is also seeking to buy Paytm shares from other holders, the sources said.
Ant has invested in 10 fintech wallets outside of mainland China, with the aim of building a network of payment services across Asia. In China, Ant is awaiting a green light to apply for a financial holding company license that would ensure it can continue its fintech operations. In a sign of progress, regulators recently allowed the firm’s consumer lending affiliate to increase capital.
Billionaire Jack Ma, who has largely remained out of public sight, has said he will cede control of Ant amid a broader retreat but still holds shares in the company.
Incorporated in 2000, One 97 Communications Ltd (Paytm) is India’s leading digital ecosystem for consumers as well as merchants. As of March 31, 2021, the company has a 333 million+ client base and 21 million+ registered merchants to whom it offers payment services, financial services, and commerce and cloud services.
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