Paytm shareholding changes: Ant exceeds 25% mark, MFs increase their stake

Chinese investor Ant Financials and domestic mutual fund players have increased their stake in digital payments and financial services firm Paytm post its recent buyback. The company in a regulatory filing updated its shareholding pattern, which shows Ant Financial’s holding in the company go up slightly from 24.86 per cent as of December 31, 2022 to 25.47 per cent now.

The revised shareholding pattern shows that mutual funds have further increased their position since December 2022 from 1.73 per cent to 2.68 per cent.

Though Ant’s holding in the company has gone up, the number of shares it holds is the same. Ant continues to hold 161.4 million shares in Paytm, the same number of shares as it held before the buyback. SEBI regulations provide a period of 90 days from the date of closure of the buyback to restore the stake below 25 per cent.

Alibaba has completely exited the fintech giant. The Chinese e- commerce company held a 6.26 per cent stake in Paytm which it sold in two tranches in January and February this year. 

Paytm completed its Rs 850-crore share buyback earlier this month. The company had informed the exchanges on February 13, that it has repurchased 15.57 million equity shares, representing 2.4 per cent of the total number of outstanding shares, at a weighted average price of Rs 545.93 per share. Consequently, the percentage stake of continuing shareholders will rise on a proportionate basis, though the absolute number of shares held by them remains the same.

Post the extinguishment of shares repurchased via buyback, the company’s share capital base stands reduced by 15.57 million shares (ie 2.4 per cent) to 633.77 million shares.

While large shareholders continue to hold the same number of shares on absolute basis, their respective stakes have now increased, Softbank is now 13.24 per cent from the earlier 12.92 per cent, Elevation Capital, via 2 entities owning >1 per cent, is now 15.45 per cent.

Domestic institutional shareholding has increased by 1.11 per cent on account of increase in shareholding of Mutual Funds and AIFs.

Foreign institutional shareholding has reduced from 72.8 per cent to 71.9 per cent. While FDI shareholding saw a reduction, FPI Cat 1 shareholding increased from 6.7 per cent to 10.6 per cent (3.9 per cent increase). According to the latest update, Alibaba has completely exited the fintech giant. The Chinese e-commerce company held a 6.26 per cent stake in Paytm which it sold in two tranches, in January and February this year.

Paytm has improved its performance metrics in the recent times, making several brokerage houses to rerate the company. Global brokerage Macquarie, for instance, double upgraded the stock to 'outperform' from 'underperform', increasing the target price by a whopping 80 per cent, recently as it sees a very visible change in the management's approach.

In its recently announced Q3FY23 results, Paytm achieved its milestone of operating profitability, much ahead of its September 2023 guidance. The company’s EBITDA before ESOP cost stood at Rs 31 crore with EBITDA before ESOP margin at 2 per cent of revenues as compared to (27 per cent) a year ago. The fintech giant’s revenue from operations increased 42 per cent YoY to Rs 2,062 crore, driven by growth in its core payments business and sustained growth momentum in credit business and commerce business.