Paytm share

Paytm Shares Rise 3% as Company Strengthens Cash Reserves with PayPay Stake Sale

 

Shares of Paytm, under One97 Communications, touched a fresh 52-week high after its board approved the sale of its interest in Japan's PayPay Corporation for a whopping Rs 2,364 crore. 


Going forward, this is likely to give a great fillip to Paytm's finances, particularly its cash reserves, which have been a concern. On December 9, Paytm shares clocked over 3%, touching a high of Rs 1,007 each on the BSE and NSE.

 

Paytm Strengthens Financial Books with PayPay Stake Sell

 

The deal will see Paytm's Singapore-based subsidiary sell Stock Acquisition Rights or SARs in PayPay to SoftBank Vision Fund 2. These SARs it had bought in 2020 gave Paytm a 7.2 percent stake in PayPay on a fully diluted basis. The PayPay valuation stands at approximately Rs 32,000 crore, and in this deal, Paytm is going to make its money back.

This sale's approval is turning out to be a perfect moment for Paytm in its quest to improve its financial position. The proceeds from this transaction will boost its cash pools, and it will start growing and developing its fintech business further. Expected to close by December 2024, the deal will improve Paytm's consolidated financial fitness.

 

Aiding investor confidence, Paytm strengthens its grip

 

Paytm, in its latest quarterly report, showed some resilience by posting a profit of Rs 928.30 crore in Q2 FY25 against a loss of Rs 290.50 crore in the same quarter last year. The revenues from operations have seen a decline, but investor confidence in Paytm has increased, partially because of such strategic moves as this stake sale.

The deal will continue to establish Paytm's leadership position in the Indian digital payments market, which is good for solidifying its presence in the market. Long-term growth, unlocking value from investment, and market presence have been ensured.