Paytm block deal: SoftBank, Ant discuss to sell stake, says report

Shareholders and investment banks representing the Ant Group and Softbank had earlier approached telecommunications tycoon and Bharti Airtel founder-chairman Sunil Mittal with an offer to buy their stakes, the report said.

However, the talks didn’t make much headway and Bharti is not currently engaged in conversations on this issue, according to the report.

Ant Group and SoftBank Group Corp are expected to offload shares gradually in the market as part of their plan to exit the digital payments company.

Ant held 24.86% of One 97 as of December last year, but its holdings rose above 25% after the repurchase reduced the number of shares outstanding, according to a Bloomberg report.

Ant remains the biggest shareholder of the Noida-based fintech firm. SoftBank and Elevation Capital own around 13% and 15%, respectively, of Paytm.

Ant has a 90-day window to cut its stake after the completion of the buyback on 13 February, the report added. One 97 announced a buyback of around ₹850 crore in December.

Earlier this month, Chinese e-commerce major Alibaba Group sold its remaining 3.3 per cent direct stake in One97 Communications for ₹1,378 crore through an open market transaction.

Paytm shares

The digital financial services firm has been under pressure to turn profitable ever since its dismal listing in November 2021.

The stock has declined around 70% since listing, and tumbled 60% last year. However, Paytm shares have rebounded about 40% from its record low in November as it shows signs of turning profitable.

The Noida-based company narrowed its third-quarter loss after a drive to add customers boosted revenue, it said in an exchange filing this February.

Last year, Paytm said it would become free cash flow positive in next 12-18 months.

Once India’s most valuable startup, Paytm has never traded above its IPO price of ₹2,150 since its listing in November 2021 and had the worst first-year share plunge among large IPOs over the past decade. The firm’s backers include SoftBank and China’s Ant Group.

Paytm is growing its product offering to attract more customers, seeking to convince investors of its earnings potential. Eight brokerages have either a buy or overweight recommendation on One 97 Communications, with a consensus 12-month price target of ₹944.64, as per Bloomberg data.

With agency inputs