Paytm has agreed to sell its stake in the Japanese payments firm PayPay to SoftBank for $279.2 million, reported Techcrunch. This move is part of Paytm's strategy to divest non-core assets following a regulatory clampdown earlier this year.
The sale will boost Paytm's cash reserves and help it recover market share in India's competitive digital payments market.
Paytm held stock acquisition rights (SARs) that were convertible into 159,012 shares, which represented a 7.2% stake in PayPay on a fully diluted basis.
Paytm invested in PayPay in September 2020 by acquiring stock acquisition rights (SARs) through its Singapore arm. These rights were part of an agreement with SoftBank, SoftBank Group, and Yahoo Japan to provide technology services to PayPay.
Besides PayPay, Paytm has also sold its entertainment ticketing business, Paytm Insider, to Zomato for $246 million (approximately Rs 2,048 crore) earlier this year.
Paytm has been selling off non-core assets to streamline its operations and boost its cash reserves. The company has been cutting costs, including reducing employee-related expenses.
Paytm has also been incorporating AI-led automation to improve operational efficiency.
Paytm is concentrating on its core payments business, enhancing its UPI offerings, and improving the user experience.
Paytm has resolved regulatory issues with the National Payments Corporation of India (NPCI) and is now able to onboard new UPI users. The company aims to expand its lending services, stockbroking, insurance distribution, and other financial products.
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