According to an exchange filing on Thursday, Japan’s SoftBank Group has cut its ownership of Indian payment provider Paytm by selling another 2% share.
The investment group currently holds just 2.83 percent, down from 5.01 percent previously. It represents a steady reduction in SoftBank’s ownership, which was at 17.5% in September 2022. SoftBank has been gradually lowering its holdings through several open market transactions over the last year, with the most recent cut coming in January.
Stance of SoftBank Group in January 2024
On January 24, 2024, the Japanese corporation disclosed a 2% drop in its interest in One 97 Communications, Paytm’s parent company, lowering its total holding to roughly 5%.
According to media sources, Softbank’s continuous disposal of the beleaguered payment firm is part of its strategy to quit the fintech sector.
Global investors like as Warren Buffett’s Berkshire Hathaway and China’s Alibaba Group sold their investments in Paytm in 2023, while others, including a Netherlands-based branch of Chinese fintech firm Ant Financial, cut their holdings.
SoftBank apparently liquidated a large portion of its Paytm assets before regulatory scrutiny caused a drop in the fintech firm’s stock price.
Recent events at One 97 Communications have exacerbated the company’s issues.
Vijay Shekhar Sharma stepped down
Founder Vijay Shekhar Sharma has stepped down as a part-time non-executive chairman and board member of Paytm Payments Bank Ltd (PPBL), a Paytm affiliate organisation.
Additionally, all of Paytm’s nominations were removed from the PPBL board. PPBL, which faced regulatory constraints owing to compliance difficulties at the end of January, has nominated new board members, including former Central Bank of India officials, retired IAS officers, and a former Bank of Baroda executive director.
Paytm shares fell
Paytm shares fell nearly 4% in afternoon session, finishing at Rs 390.05. The business’s shares have plunged by 48.5%, resulting in a value loss of around Rs 23,400 crore ($2.8 billion) after the Reserve Bank of India forced the company to shut down its banking arm on January 31 owing to persistent regulatory violations.
