One 97 Communications Ltd (“Paytm”) is up 6.95% on Monday after the announcement of Founder, Managing Director and CEO of Paytm – Vijay Shekhar Sharma (“Mr. Sharma”) entering to a definitive agreement on 7th August with Antfin, netherlands to acquire 10.38% stake, wherein Antfin will transfer 65,335,101 shares of the company in a non cash transaction to an entity held 100% by Mr. Sharma – Resilient Asset Management Ltd (“Resilient”).
This will make Mr. Sharma’s stake the largest in Paytm at 19.42% and lower Antfin stake to 13.5% from 23.79% prior to the deal. The deal price is based on the closing price as of 4th August 2023 and the deal is also set to offer 10.30% voting rights to Mr. Sharma. Mr. Sharma, through Resilient has offered consideration of Convertible Debentures to Antifin at the value of the stake acquired that demonstrates both parties’ continued confidence in the company’s performance and vision.
The deal structure splits rights and benefits between Mr. Sharma and Antfin and reinforces to investors and regulators that Mr. Sharma is firmly in control and to a lesser extent from the Chinese shareholding.
Paytm is 7.3% away from its 52W high and TTM Net Income and TTM Revenue growth above industry median. Paytm reported robust Q1 FY earnings – Revenue up 39.4% YoY to Rs. 2,341 crore. Net Operating Loss narrowed 44.6% YoY to Rs. 357 crore. EBITDA loss also narrowed 68% YoY to Rs. 532 crore.
Mr. Sharma also stated in Q1 FY24 earnings call that the company is most likely going to be cash flow positive by the end of this year. Paytm also received mixed valuation from the sell side. Motilal Oswal revised its valuation from a target price of Rs. 900 in May to Rs. 1000 in July. ICICI securities lowered its target from Rs. 1285 in December 2022 to Rs. 1055 in July.
Paytm engages in providing payment services, cloud, commerce and other fintech services to retail clients in India. The company facilitates payments, integrates onto it the UPI system, an allowing ease of transactions like bookings and P2P payments. It also provides a storefront for various products. It is based in Noida and incorporated in 2000.
Written by Sandeep R
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
