According to people familiar with the matter, Ant Group, China’s largest fintech conglomerate, is anticipated to sell at least 5% of its 30.33 percent stake in One97 Communications, the parent company of Paytm, before the latter’s IPO in November. Paytm wants to decrease Ant’s stake to less than 25% in order to list it as a “professionally managed firm” via an Offer for Sale, according to market regulator Securities and Exchange Board of India (SEBI) (OFS). A promoted group does not exist in a properly managed firm. This may be accomplished, according to regulatory experts, by reducing all investors’ holdings to less than 25% and diluting certain beneficial ownership requirements in accordance with SEBI rules under the Companies Act, but this is not legally enforceable.
Although Ant Group and Alibaba hold 38 percent of Paytm, Paytm is expected to ask the authorities to classify them as two independent entities. Alibaba, a unit of the Ant Group, owns a little more than 7% of Paytm.
Ant began as Alibaba’s payments division before being split off into its own company by Jack Ma. Based on Paytm’s current worth of $16 billion, Ant Group is expected to make $800 million from the share sale.
The office might be divided as a Qualified Institutional Placement (QIP) ahead of the much-anticipated IPO of food delivery firm Zomato, according to the article.
Paytm informed its shareholders in June that it was considering pre-IPO financing.
Amit Nayar resigned last week, the most noteworthy of which is that its former president Paytm has witnessed a slew of high-level departures in the run-up to its IPO. Nayyar, a former Goldman Sachs executive, joined the startup’s financial services division in 2019 and has played a key role in the development of its insurance and lending sectors.
Names like Amit Veer Paytm’s chief business officer and senior vice president of user growth, Rohit Thakur, Paytm’s chief human resource officer, and Jaskaran Singh Kapany, Paytm’s head of marketing, are among those who have left the firm in the previous few months.