MUMBAI: Paytm is selling its stake in Japan’s PayPay Corporation as part of its strategy to divest its non-core assets.
In an exchange filing on Friday, Paytm said that the board of its Singapore subsidiary has approved the sale of stock acquisition rights in PayPay. “This transaction will increase the consolidated cash balance of the company,” Paytm said without disclosing the specifics of the deal. Paytm is understood to be selling its stake in the company to SoftBank in a deal pegged at about $250 million. A spokesperson for SoftBank did not respond to queries.
Paytm, which had come under regulatory scrutiny due to non-compliance at its now wound down banking unit, has sharpened focus on its core payments and financial services businesses. In August this year, the Noida-based fintech had sold its entertainment ticketing business to Zomato in a Rs 2,048 crore deal.
In an earnings call with analysts earlier this year, Paytm CFO Madhur Deora had said that the carrying value of the firm’s stock acquisition rights in PayPay stand at nearly Rs 2,000 crore. Paytm has about a 5.4% stake in PayPay. The Japanese fintech was founded in 2018 as a joint venture between SoftBank Group and Yahoo Japan. SoftBank, which had been one of Paytm’s early backers, had tapped into the startup’s technological expertise to build PayPay’s business in Japan.
Earlier this year, SoftBank fully exited Paytm. As of Sept, the Noida-based fintech had a cash balance of Rs 10,410 crore.