Paytm, one of India’s largest digital payments platform, has announced selling off stake in Japan’s PayPay — the largest payments network in Japan. Value of the sell-off hasn’t been officially disclosed, though reports claim it to be near about $250Mn. The news resultant in Paytm’s stock closing 2% at ₹975, close to its ₹991 52-week high price.
Incidentally, SoftBank, which was one of Paytm’s biggest shareholders and backers before its disappointing public listing, is the one buying PayPay stake from Paytm.
The confirmation wasn’t upfront, and only came up as a clarification to India’s stock exchanges in response to a media report on the matter. “We wish to clarify that we have been informed by One97 Communications Singapore Private Limited, a wholly owned subsidiary of the company (‘Paytm Singapore’) that its Board of Directors at its meeting held today i.e., December 6, 2024, approved sale of Stock Acquisition Rights (SARs) in PayPay Corporation, Japan,” Paytm said in a filing to the exchanges.
In terms of the financial value of the deal, Paytm said that the transaction will increase its consolidated cash balance “to the extent of sale consideration to be received by Paytm Singapore.”
PayPay, which boasts of nearly 55 million users in Japan, is the largest digital payments platform in the country. The platform has more recently seen rapid growth, thanks to backing by the government in its push to transfer to a more digital economy than a cash-based one. PayPay, according to an earlier Reuters report, is also considering a possible US listing to bank on high valuations in dollar terms. SoftBank, unofficially, has considered valuing PayPay at $6.8Bn.
For Paytm, the sale would mean a massive boost to its cash reserves, one that it needs more and more as it looks to divest non-core businesses and scale its core payments platform. Recent sale of its ‘Insider’ business to Zomato was another similar move in that direction.
