Paytm is distancing itself from Chinese firms, CEO Vijay Shekhar Sharma to Become Largest Shareholder

After this deal, Sharma will be the largest shareholder in Paytm with his 19.42 percent stake. An analyst at a brokerage firm said, “Due to the concerns of the government and RBI about China’s stake in Indian fintech companies, the stake of Chinese companies in Paytm is being reduced.” Paytm After this deal, the stake of Ant Financial (Netherlands) will reduce to 13.5 percent. However, no cash payment will be made by Paytm for this deal. The convertible debentures will be issued to Ant Financial on behalf of one of Sharma’s entities.

Paytm has said in a statement about this, “No cash payment will be made for this acquisition nor will Sharma give any guarantee or other assurance.” The company said that this deal will not cause any change in the management or control of Paytm. Earlier this year, China’s Alibaba also sold its entire stake in Paytm. Apart from this, Japan’s SoftBank Group is also reducing its stake in Paytm through open market deals. SoftBank Group’s stake in Paytm is 9.18 percent. The company’s shares have risen after Sharma’s announcement of increasing his stake in the company.

However, despite the increase in the company’s share price, it is 60 percent less than the listing price almost two years ago. In November last year, the Reserve Bank of India (RBI) had rejected Paytm’s application for payment aggregator license. However, the company was later allowed to reapply for the license. Due to disputes over border disputes with China and some other issues, the central government has tightened restrictions on Chinese companies. In this series, many Chinese apps were also banned. Apart from this, rules are also being tightened for these companies.