Ant Financial's stake value declines to Rs 2,742 crore on Paytm woes

The Chinese company, however, had sold its stake worth Rs 8,293 crore in three tranches over the one year thus saving a major part of its portfolio from the meltdown

The value of China’s Ant Financial, which holds 9.89 per cent stake in One 97 Communications, has dropped to Rs 2,742 crore as on Monday with the recent fall in the latter’s share price.

The Chinese financial giant, which had invested in One 97 Communications since 2015, has seen a sharp decline of 45 per cent, or Rs 2,125 crore, in its stake value since the Reserve Bank of India (RBI) took action against Paytm Payments Bank on January 31. One 97 shares closed at Rs 422.6 a share on Monday.

The Chinese company, however, had sold its stake worth Rs 8,293 crore in three tranches over one year. It thus saved a major portion of its portfolio from the Paytm share meltdown witnessed since early this month.

 

According to public filings, Alibaba and Ant Financial had invested $851 million in Paytm since 2015. The company started selling shares in the stock markets after One 97 Communications was listed in November 2021.

One 97 Communications’ initial public offering (IPO) was launched at Rs 2,150 a share and Ant Financial exited at an average price of Rs 616 a share in the first quarter of 2023. It further exited at Rs 755 in the second quarter and Rs 856 in the third quarter, according to statistics collected from Bloomberg.

An email sent to Ant Group did not elicit any response.

Interestingly, in August last year, Vijay Shekhar Sharma had acquired a 10.3 per cent stake from Ant for $628 million, making him the largest shareholder in the company. 

According to the agreement, Resilient, a VSS entity, will acquire ownership, and voting rights, of the 10.30 per cent block.

According to the plan, Resilient issued optionally convertible debentures (OCDs) to Antfin, which, in turn, allowed Antfin to retain economic value of the 10.30 per cent stake. This demonstrated Antfin’s continued confidence in the business potential.

Accordingly, no cash payment was made for the acquisition, and neither will any pledge, guarantee, or other value assurance be provided by Sharma.

Apart from Ant Financial, SAIF III Mauritius (10.85 per cent), SVF India Holdings (SoftBank — 6.46 per cent), and founder Sharma, with 19.4 per cent stake, are the major shareholders of One 97 Communication.