NEW DELHI: Following the announcement that Paytm will merge its wallet and Payments bank businesses together, Paytm founder and CEO Vijay Shekhar Sharma sold one per cent of his shares in One97 Communications, the holding firm of the payments systems company, to its shareholders for about Rs 325 crore.
This amount raised, according to the company, will be used to fund and expand Paytm’s proposed payments bank operations, in which Sharma holds a 51 per cent stake. Paytm has been at the forefront as one of the most significant proponents of the demonetisation move, with its businesses following the November 8 announcement from Prime Minister Narendra Modi growing several times.
“It is done for Paytm payments bank investment,” reports stated Paytm spokespersons as saying, adding that the shares have been bought by the existing shareholders. Other details of the deal however, have not been disclosed.
The development is significant for several reasons, not least of which is that the deal puts the valuation for the firm at around $5 billion.
As of the end of March, 2016, Sharma had held over 21 per cent of the stake in One97 Communications, latest sale, if the shareholding patterns have not changed, will bring down his holding to over 20 per cent.
Paytm had announced its entry into the Payments banking space last year, when the Reserve Bank of India had awarded ‘in-principle’ approval to Sharma, the founder of One97 Communications, to set up a payments bank.