Paytm has completed the sale of 5.4% stake, worth over Rs 2,300 crore, which it held in Japan's digital payments company PayPay Corp., according to an exchange filing on Friday.
The stake was offloaded by One97 Communications Singapore Pvt. a subsidiary of the company. In a press release on Dec. 6, the company had stated that the stake would be sold to investor SoftBank for $280 million or around Rs 2,364 crore.
"We are grateful to Masayoshi-san and the PayPay team for giving us the opportunity to together create a mobile payment revolution in Japan. We remain fully committed and will continue to support PayPay's product and technology innovations in future. We are working on introducing new AI-powered features to accelerate PayPay’s vision in Japan," a Paytm Singapore spokesperson said.
"The sale net proceeds would fortify the consolidated cash reserves of One97 Communications and help drive future business initiatives, focused on maximizing value creation for shareholders," it added.
The divestment is part of Paytm's strategy to offload non-core assets, and shift its focus mainly on the core payments solutions business. The company had earlier divested its entertainment, sports, and events ticketing business — Insider and TicketNew — to Zomato for Rs 2,048 crore.
One97 Communications Q2 Performance
One97 Communications Ltd., the parent company of Paytm, reported a smaller loss in the second quarter, with revenue increasing by approximately 8%.
The Vijay Shekhar Sharma-led fintech’s consolidated net loss decreased sequentially to Rs 291.7 crore for the quarter ended September. This was slightly higher than the Rs 285.2 crore loss predicted by analysts tracked by Bloomberg.
The company’s total revenue included approximately Rs 1,524 crore from its payment business and Rs 571 crore from the loan distribution segment.
Shares of One97 Communications on Friday closed 3% higher at Rs 984.25 apiece on the National Stock Exchange, compared to a 0.89% rise in the benchmark Nifty 50.
The stock has risen 64.04% in the last 12 months and 54.89% year-to-date.
Out of the 18 analysts tracking the company, seven have a 'buy' rating on the stock, six recommend 'hold' and five suggest 'sell', according to Bloomberg data. The average of 12-month analysts' consensus price target implies a potential downside of 24.6%.
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