Antfin to Offload Stake in Paytm: Changing Landscape in Fintech

Antfin's Stake Sale: Dynamics Shift in Paytm's Ownership Amidst Fintech Resilience

Antfin's Stake Sale: Dynamics Shift in Paytm's Ownership Amidst Fintech Resilience

Anticipations are high as Antfin gears up to sell a 3.6% stake in fintech major Paytm through a block deal scheduled for Friday. Reports indicate that this transaction, priced at Rs 880.1 per share, will involve the offloading of around 2.3 crore shares. The offer price marks a marginal discount of 2.6% from the current levels. At present, Antfin holds approximately 23.79% stake, as of June 2023.

A Shifting Ownership Landscape

Paytm, a prominent player in the digital payments sphere, is experiencing shifts in its ownership landscape. Founder and CEO Vijay Shekhar Sharma holds about 9.12% stake at the end of the June quarter. Notably, Sharma has recently entered into an agreement to acquire an additional 10.3% stake through an off-market transfer from Antfin, an affiliate of the Chinese conglomerate Alibaba.

Upon the completion of this deal, Sharma’s holding will surge to 19.42%, positioning him as the largest shareholder. This transition will correspondingly reduce Antfin’s stake to 13.5%. Sharma expressed his gratitude to Ant for their unwavering support and partnership over the years as the transfer was announced.

Financial Performance and Projections

Amidst a rally that has seen Paytm‘s shares rise nearly 71% this year, research firm Bernstein has initiated coverage on the stock, projecting a further upside of 22%. In the recent first quarter, Paytm managed to narrow its consolidated net loss to Rs 357 crore. At the operating level, EBITDA before ESOP improved to Rs 84 crore, with margins standing at 4%. This improvement was attributed to an increase in contribution margin and operating leverage.

The lending business witnessed remarkable growth, distributing Rs 14,845 crore in loans through the platform in the first quarter, marking a 167% YoY increase. Leveraging its robust monthly transacting user (MTU) base, Paytm’s dominance in payments has provided a strategic edge in the digital lending segment.

Market Response and Future Outlook

Despite the market’s ebbs and flows, Paytm’s performance has been impressive, prompting a positive outlook. Shares of Paytm closed 0.15% lower at Rs 904.2 on the Bombay Stock Exchange (BSE) on Thursday. As the landscape of fintech continues to evolve, Paytm’s dynamic ownership changes and resilient financial performance underscore its significance in the sector.

Disclaimer: The information provided here is for educational purposes only and should not be considered financial advice. Always conduct thorough research and consider consulting a financial professional before engaging in algorithmic trading.

Attud: