Gautam Adani, chairman of the Adani Group, is reportedly considering a strategic investment in One 97 Communications, the parent company of Paytm, according to a report by the Times of India. This potential deal could significantly impact the fintech landscape, but Paytm has officially denied any such discussions. “We have always made and will continue to make disclosures in compliance with our obligations under SEBI,” Paytm clarified.
According to media reports, on May 28, Paytm founder and CEO Vijay Shekhar Sharma reportedly met with Gautam Adani at the Adani Group’s headquarters in Ahmedabad. The meeting was said to be aimed at finalizing the contours of a deal, according to sources cited by the Times of India. However, Paytm swiftly responded to these reports, stating that the news is speculative and that no discussions are taking place. Despite this denial, Paytm’s shares experienced a notable surge on May 29. The fintech’s shares are currently priced at ₹359.45.
Nonetheless, Adani’s interest in Paytm could prove to be a lifeline for the Indian fintech. Paytm, once a high-flying fintech star, has recently encountered a series of challenges. Regulatory actions from the Reserve Bank of India (RBI) restricting Paytm Payments Bank (PPBL) from on-boarding new customers and conducting certain transactions have significantly impacted its business model. These restrictions were imposed in response to concerns over compliance with financial regulations. Additionally, Paytm has grappled with a decline in its user base and mounting financial losses. On May 8, Aditya Birla Finance invoked loan guarantees due to repayment defaults by customers. Following this, other financial partners such as Piramal Finance and Clix Capital also ended their partnerships with the Indian fintech firm.
In this scenario, the financial standing of Adani Group could provide a much-needed capital infusion to help Paytm navigate regulatory hurdles and stabilize its operations. This capital could be critical for Paytm to invest in compliance measures, as well as address its operational shortcomings.
As of now, Vijay Shekhar Sharma holds around 19% of One 97 Communications (Paytm’s parent company), with his stake valued at around ₹4,218 crore based on the stock’s closing price of ₹342 per share as of May 28. Sharma’s holdings are divided between a direct ownership of 9% and an additional 10% held through Resilient Asset Management, an overseas entity. Both Sharma and Resilient Asset Management are classified as public shareholders in One 97’s filings with stock exchanges.
If the Adani Group enters the fintech market by acquiring a stake in Paytm, then it would position the conglomerate against established fintech giants like Google Pay, Walmart-owned PhonePe, and Mukesh Ambani’s Jio Financial. This potential acquisition would follow Adani’s recent major purchases, including Ambuja Cements and NDTV.
This development also comes barely 24 hours after reports that the enterprise is eyeing an entry into the country’s e-commerce and digital payments landscapes (as we reported earlier). Acquiring a stake in Paytm would also offer them immediate access to a vast user base, and its existing customer base across diverse sectors like ports, energy, and infrastructure could potentially be integrated with Paytm’s platform in order to create a comprehensive ecosystem for transactions and financial services.
