Vijay Shekhar Sharma Becomes The Sole Significant Beneficial Owner of Paytm; Stock In Focus

Fintech giant, One97 Communications aka Paytm has announced that Chinese conglomerate Alibaba Group-backed Antfin has reduced its shareholding in the company from 23.79% to 9.90% of the total equity share capital. Hence, Founder and CEO Vijay Shekhar Sharma has become the sole Significant Beneficial Owner (SBO) of Paytm. The company's stock will be in focus.

In its regulatory filing on Sunday, Paytm said, "We have been informed by Antfin, that their shareholding in the Company has reduced from 23.79% to 9.90% of the total equity share capital. Accordingly, no person affiliated with Antfin will qualify as a
Significant Beneficial Owner ("SBO") of the Company."

In the last few weeks, Antfin's total shareholding in Paytm has significantly reduced from 23.79% after it sold a 10.3% stake to Resilient Asset Management B.V., an overseas entity 100% owned by Vijay Shekhar Sharma. This was followed by the sale of another 3.6% in block deals.

Accordingly, Sharma will be the only SBO of the Company, consequent to the change of shareholding. The total share capital of Sharma in OCL, both direct and indirect, is 19.42% making him the sole SBO of the company. However, Paytm remains a professionally managed company with no identified promoter. As per Indian laws, for anyone to be identified as a promoter, the shareholding has to be above 25%.

Analysts believe that Sharma becoming the SBO, will remove the Chinese overhang from Paytm's stock. An earlier report by BofA Securities said that buying this stake in Sharma "indicates his confidence in the story with a 'skin in the game's approach show". It added that this reduces the risk of some other strategic investor coming who would have a major stake like Sharma's.

The global brokerage firm further said, "We believe a Chinese shareholder (Antfin) ceasing to be the largest shareholder, would also directionally be positive for the company fundamentals."

Analysts believe that this will also be a positive for Paytm in terms of regulatory matters.

Last week, on Friday, Paytm's share price closed at Rs 857.20 apiece, up by 0.42% on BSE. In six months, Paytm stock has rallied by over 37% on the BSE.

While year-to-date, Paytm shares have zoomed by a little over 61% on the exchange.

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