SoftBank Trims Stake in Paytm Parent One 97 Communications

In a significant move, SoftBank's investment arm, SVF India Holdings, has reduced its stake in One 97 Communications, the parent company of the popular digital payment app Paytm, by 2.17%. This reduction was achieved through the sale of 13.7 million shares in the open market over the past month.

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Current Stake and Disposal Details

Following this transaction, SVF India Holdings Cayman, an affiliate of SoftBank, now holds a 2.83% stake in One 97 Communications. The disposal of shares was carried out in a series of transactions between January 23, 2024, and February 26, 2024, with the final sale on February 26th crossing the 2% threshold specified in the SEBI Takeover Regulation.

Paytm Payments Bank Under Regulatory Scrutiny

This development comes at a time when One 97 Communications' associate entity, Paytm Payments Bank Limited (PPBL), is facing regulatory scrutiny. In a recent regulatory action, the Reserve Bank of India (RBI) imposed restrictions on PPBL, prohibiting it from accepting new deposits or top-ups in customer accounts, wallets, FASTags, and other instruments. The initial deadline for this restriction was February 29th, but it was later extended to March 15th.

Leadership Changes at Paytm Payments Bank

Amidst these regulatory challenges, Vijay Shekhar Sharma, the founder of One 97 Communications, stepped down as the part-time non-executive Chairman of Paytm Payments Bank Limited. Consequently, the bank's board was reconstituted, and the process of appointing a new Chairman has commenced.

SoftBank's reduction in its stake in One 97 Communications and the ongoing regulatory scrutiny of Paytm Payments Bank highlight the challenges faced by the fintech industry in India. As the regulatory landscape evolves, companies like One 97 Communications must navigate these complexities to ensure sustainable growth and compliance.