According to people familiar with the matter, Ant Group Co. is planning to sell part of its shares in the operator of Indian financial technology firm Paytm to keep its holding within a required threshold.
The Chinese fintech major has been considering options to diminish its stake in One 97 Communications Ltd. post its share percentage surged passively due to share buybacks, according to the people, who requested not to be identified because the matter is private.
The people further added that the talks are yet in its initial stages and details are liable to change depending on regulatory and pricing concerns. Ant didn’t immediately respond to emailed requests for comment. Paytm refused to comment on the matter.
As the e-commerce giant pared back investments in India amid escalating geopolitical tensions, the deliberations follow Ant affiliate Alibaba Group Holding Ltd.’s sale of its stake in Paytm Ant’s sale would be for technical and not political reasons, the people added.
One of the people said that the company held 24.86 per cent of One 97 as of December 2022, but its holdings surged above 25 per cent after the repurchase decreased the number of shares outstanding. Ant has a 90-day window to snip its stake post the completion of the buyback on Feb. 13, the source added. In December last year, One 97 announced a buyback of as much as 8.5 billion rupees ($100 million).
Meanwhile Ant wants to pull back, Indian telecommunications tycoon Sunil Mittal is seeking a stake in Paytm by merging his financial services unit into the fintech giant’s payments bank, according to people with knowledge of the matter.
Mittal seeks to fold Airtel Payments Bank into Paytm Payments Bank in a stocks deal and is also interested in buying Paytm shares from other holders, the sources said, on the condition of anonymity. Talks are in preliminary stages and Airtel and Paytm may not finalise a deal, the sources added.
With the objective of building a network of payment services across Asia, Ant Group has invested in 10 fintech wallets outside of mainland China.
Ant is awaiting a green light to apply for a financial holding company license in its home country China, that would ensure it can continue its fintech operations. Recently, regulators allowed the firm’s consumer lending affiliate to increase capital who see it as a sign of progress.
Billionaire Jack Ma, who has largely remained out of public sight in the last few years, has said he will take control of Ant amid a broader retreat, but still holds shares in the company.