Paytm founder & CEO Vijay Shekhar Sharma met Adani at the latter’s office in Ahmedabad on Tuesday to “finalise the contours of a deal”, the sources added.
If a transaction works out between the two first-generation entrepreneurs, it will mark the ports-to-airports group’s foray into the fintech sector, competing against Google Pay, Walmart-owned PhonePe and Mukesh Ambani’s Jio Financial.It will also be one of Adani’s significant purchases after Ambuja Cements and NDTV.
Sharma owns about 19 per cent in One 97, which is worth Rs 4,218 crore based on the stock’s Tuesday closing price of Rs 342 apiece. Sharma owns 9 per cent in Paytm directly, and holds another 10 per cent through a foreign entity Resilient Asset Management. Both Sharma and Resilient, according to One 97’s filings with stock exchanges, are listed as public shareholders.
Sebi rules require an acquirer, holding less than 25 per cent in a target company, to make an open offer for a minimum 26 per cent stake of the company. The acquirer can also make an open offer for the entire share capital of the company.
Sources said that discussions between Adani and Sharma have been going on for a while and their meeting at Adani Corporate House in Ahmedabad on Tuesday involved “finalising the contours of the deal”. They added that Adani is also in talks with funds from West Asia to bring them as investors in One 97, which pioneered mobile payments in the country.
Other significant shareholders of One 97 are private equity fund Saif Partners (15%), Jack Ma-founded Antfin Netherlands (10%) and the company’s directors (9%). Emails sent to Adani Group and One 97 on Tuesday didn’t elicit a response till the time of going to press. One 97, founded by Sharma in 2007, and whose IPO was the second biggest in the country, has a market cap of Rs 21,773 crore.
“With the financial strain and regulatory bottlenecks that Paytm is facing, aligning with Adani Group would provide the robust financial backing needed to address regulatory compliance issues and stabilise its operations. For Adani, integrating Paytm’s established digital payments platform into their diverse business portfolio would enhance their digital footprint and accelerate their ambition to become a leading player in the fintech space,” said Katalyst Advisors’ executive director Binoy Parikh.
“It would also provide Adani with immediate access to Paytm’s extensive user base and technology infrastructure, enabling the group to offer a seamless digital payments experience across its various consumer-facing businesses, including airports, retail, and energy,” Parikh added.
One 97, which started out as a recharge platform, had moved its payment and merchant acquiring business to Paytm Payments Bank (PPBL). However, with RBI freezing the activities of PPBL this year, it focused on UPI payments, distribution and merchant acceptance.