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According to people familiar with the situation, Ant Group Co. is considering selling a portion of its stake in Paytm, the Indian financial technology startup’s operator.
According to the persons who asked not to be identified since the topic is confidential, the Chinese fintech behemoth has been contemplating ways to lower its interest in One 97 Communications Ltd. after its share price passively climbed due to share buybacks.
The talks are preliminary, and specifics may alter based on regulatory and pricing issues, according to the sources. Ant did not reply immediately to emailed demands for comment. Paytm declined to respond.
The discussions follow the sale of Ant subsidiary Alibaba Group Holding Ltd.’s stake in Paytm, as the e-commerce giant reduced its stakes in India amid rising geopolitical concerns. According to the individuals, Ant’s selling would be for technical reasons rather than political ones.
Ant owned 24.86% of One 97 in December, but its stake increased to more than 25% after the repurchase lowered the number of shares outstanding, according to one of the sources. According to the individual, Ant has a 90-day window once the repurchase concludes on February 13 to reduce its ownership. In December, One97 announced a repurchase of up to 8.5 billion rupees ($100 million).
While Ant intends to withdraw, Sunil Mittal, an Indian telecoms mogul, is pursuing a stake in Paytm by combining his financial services arm into the fintech giant’s payments bank, according to individuals familiar with the situation.
Mittal wants to merge Airtel Payments Bank and Paytm Payments Bank in a stock transaction, and he also wants to purchase Paytm shares from other holders, according to people who asked not to be identified because they were sharing private information. The talks are still in their early stages, and Airtel and Paytm may not reach an agreement, according to the sources.
Ant has invested in ten fintech wallets outside of mainland China with the goal of creating an Asian payment network.
In China, Ant is waiting for approval to apply for a financial holding company licence, which will allow it to continue its fintech operations. As a sign of progress, authorities recently approved an increase in capital for the firm’s consumer lending unit.
Billionaire Jack Ma, who has mainly kept out of the public eye, has stated that he will relinquish management of Ant as part of a larger retreat but will retain ownership of the firm.