Adani Group Planning To Acquire Stake In Paytm, Say Reports
Paytm however has denied any such development and called the news speculative
Adani Group Chairman Gautam Adani is reportedly interested in acquiring a stake in One 97 Communications, the parent company of mobile wallet Paytm, according to a media report. However, Paytm has denied any such development.
The media reports suggests that Paytm founder and CEO Vijay Shekhar Sharma met with Adani at the Adani Group headquarters in Ahmedabad on 28 May to "finalise the contours of a deal." Despite these claims, Paytm has issued a statement clarifying that the news is speculative and that the company is not engaged in any such discussions.
If the Adani Group, known for its extensive interests spanning from ports to airports, successfully enters the fintech market through this potential acquisition, it would position itself against prominent players like Google Pay, Walmart-owned PhonePe, and Mukesh Ambani's Jio Financial Services. This move would also mark one of Adani’s significant acquisitions following its purchases of Ambuja Cements and NDTV.
Vijay Shekhar Sharma holds approximately 19 per cent of One 97 Communications, valued at Rs 4,218 crore, with shares closing at Rs 342 each on 28 May. Sharma's stake includes a 9 per cent direct ownership and an additional 10 per cent held through Resilient Asset Management, an overseas company. Both Sharma and Resilient Asset Management are identified as public shareholders, according to One 97’s filings with stock markets.
The potential deal comes at a critical time for Paytm, which has faced significant regulatory and financial challenges. On 31 January, the Reserve Bank of India (RBI) imposed business restrictions on Paytm Payments Bank (PPBL) due to repeated violations of norms and non-compliance with multiple rules.
The RBI barred PPBL from accepting fresh deposits and conducting credit transactions after 29 February. Additionally, in March 2024, PPBL was prohibited from onboarding new clients following an audit report highlighting persistent non-compliances and ongoing material supervisory concerns. Since these regulatory actions, Paytm’s share value has plummeted, eroding more than 50 per cent of investors' wealth.
Further compounding Paytm’s troubles, reports have indicated that key lending partners such as Aditya Birla Finance invoked loan guarantees due to repayment defaults from customers on 8 May. Other lenders, including Piramal Finance and Clix Capital, have also terminated their partnerships with Paytm following the RBI's ban on PPBL operations.
Amid these challenges, a potential partnership with the Adani Group could provide much-needed support for Paytm. The Adani Group’s entry into the fintech sector may offer strategic synergies and financial backing, potentially aiding Paytm in stabilising its operations and rebuilding trust with stakeholders.
