According to people with knowledge of the matter, Indian telecommunications tycoon Sunil Mittal is looking forward to get a stake in Paytm by merging his financial services unit into the fintech giant’s payments bank. However, the reports suggest that the talks are still in early stages, and a deal may not be reached.
Airtel logo is shown in the picture above.
Image Courtesy: Rafael Henrique
Mittal wishes to fold Airtel Payments Bank into Paytm Payments Bank in a stocks deal and is also looking to acquire Paytm shares from other holders, the people familiar with the matter said, asking to stay anonymous while discussing private information. They added that talks are in early stages and Airtel and Paytm may not reach a deal.
Shares of Paytm, formally known as One 97 Communications Ltd., have rebounded about 40% from its record low in November as it shows signs of turning profitable. The company narrowed its third-quarter loss after a drive to add customers boosted revenue, it said in an exchange filing this month.
“We remain fully focused on our strong organic growth journey and are not involved in any such discussions,” a representative for Paytm said in an email statement. A spokesman for Bharti Enterprises Ltd., controlled by Mittal, said the company won’t comment on market speculation.
Once India’s most prized startup, Paytm has never traded above its IPO price of 2,150 rupees since its last listing in November 2021 and had the worst first-year share plummet among large IPOs over the last ten years. The company’s backers comprise of Japan’s SoftBank Group Corp. and China’s Ant Group Co.
Mittal’s six-year-old payments bank had 129 million customers and had turned profitable in the year to March 31, 2022, as per exchange filings.
As per the data compiled by Bloomberg news, “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 rupees.”