Pàytm’s wholly-owned Singapore unit approves stake sale in Japan’s PayPay 

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One97 Communications, which owns brand Paytm, on Friday announced that its wholly-owned Singapore subsidiary has approved a stake sale in the Japanese fintech company PayPay.

“We wish to clarify that we have been informed by One97 Communications Singapore Private Limited, a wholly owned subsidiary of the Company (Paytm Singapore) at 12:49 p.m. (IST), that its Board of Directors, at its meeting held today, i.e., December 6, 2024, approved the sale of Stock Acquisition Rights (SARs) in PayPay Corporation, Japan,” Paytm said in a statement to the Indian stock exchanges.

Paytm’s filing came in response to stock exchanges query on a media report on Friday morning that stated  “Paytm to sell stake in Japan’s PayPay to SoftBank for $ 250 million”.

Although Paytm did not voluntarily disclose the deal size on the exchanges or the name of the buyer, the value of the deal is reportedly pegged at $ 250 million.

However, Paytm did confirm to the Indian stock exchanges on Friday that this transaction would increase the consolidated cash balance of the company by the sale consideration to be received by Paytm Singapore.

Paytm CFO Madhur Deora had during the company’s Q1 FY24 earnings call said that the carrying value of Paytm’s stock acquisition right in PayPay is valued about ₹ 2,000 crore. Paytm had earlier invested in PayPay in 2018. 

Joint venture

It maybe recalled that PayPay had started as a joint venture between Japanese technology conglomerate SoftBank Corp and Yahoo Japan Corporation, with Paytm as a technology partner. At that time, SoftBank was one of the largest shareholders in Paytm. PayPay was founded in June 2018.

On Friday, Paytm shares hit a 52-week high during intraday trading, with its share price touching ₹ 990.9 per share. The stock price closed at ₹ 975.8 per share, up 2 per cent.

Paytm Founder and Chief Executive Officer (CEO) Vijay Shekhar Sharma had recently said that the Japanese company PayPay held a 65 per cent market share on the customer side and a 75 per cent share on the merchant side.

The latest announcement on the approval of stake sale in Japanese firm PayPay comes few months after Paytm sold its entertainment ticketing business to food aggregator Zomato for ₹ 2,048 crore.

Aided by an one-time exceptional gain of ₹ 1,345 crore from sale of entertainment ticketing business, Paytm had reported a consolidated net profit of ₹930 crore for the second quarter ended September 30, 2024. This was against net loss of ₹292 crore recorded in the same quarter last fiscal. In the June 2024 quarter, Paytm had reported a net loss of ₹840 crore.