Paytm's wholly-owned Singapore unit approves stake sale in PayPay

One97 Communications, the company that operates brand Paytm, on Friday said the firm’s wholly-owned Singapore entity approved stake sale in Japanese fintech corporation PayPay. 

 

The value of the deal is reportedly pegged at $250 million although the company did not voluntarily disclose the deal size on the exchanges. 

 

“We wish to clarify that we have been informed by One97 Communications Singapore Private Limited, a wholly owned subsidiary of the company (‘Paytm Singapore’) at 12:49 pm (IST), that its board of directors at its meeting held on December 6, 2024, approved sale of stock acquisition rights (SARs) in PayPay Corporation, Japan,” the company said in a statement to the exchanges. 

 

The company did not respond to Business Standard’s query requesting a comment on the development till going to press. 

 

The Paytm stock hit a 52-week high during intraday trading. Its share price touched Rs 990.9 per share. The stock price closed at Rs 975.8, up 2 per cent. 

 

The company, in the filing, also stated that this transaction will increase the consolidated cash balance of the company to the extent of sale consideration to be received by Paytm Singapore.

 

Carrying value refers to the measurement of the value of a company’s investments or assets. 

 

During its June earnings call (Q1FY25) with analysts, Paytm chief financial officer (CFO) Madhur Deora had said the carrying value of the firm’s SAR in PayPay was pegged at Rs 2,000 crore ($250 million). 

 

PayPay is a payments services company based in Japan. It is a joint venture between SoftBank and Yahoo Japan, with Paytm as a technology partner. It was founded in June 2018.

 

At an event in Mumbai last week, Paytm founder and chief executive officer (CEO) Vijay Shekhar Sharma said the Japanese company had a 65 per cent market share on the customer side and a 75 per cent share on the merchant side. 

 

The announcement of the approval of the stake sale comes months after the company sold its entertainment ticketing business to food aggregator Zomato for Rs 2,048 crore. 

 

The sale of non-core businesses comes as the company looks to divest these assets and focus on its business of payments and distribution of financial services. 

 

The focus on core businesses comes as the firm navigates around regulatory challenges — the latest one being the Reserve Bank of India’s (RBI) action on its associate entity Paytm Payments Bank. 

 

In October, it received a nod from the National Payments Corporation of India (NPCI) to start onboarding new users after a nearly 10-month embargo to sign new users on the platform. 

 

In the Unified Payments Interface (UPI) space, the company operates as the third largest third party application provider (TPAP) with a market share of around 7 per cent.