Show of resolve
1 min read 07 Aug 2023, 11:36 PM ISTPaytm CEO buys 10.3% stake, becomes largest shareholder, boosting investor confidence.
PremiumFor a stock that got battered after its initial share sale and failed to reclaim its offer price high, a display of confidence by its prime-mover shareholders was sorely needed. So, when One 97 Communications Ltd, parent of Paytm, said founder and chief executive officer Vijay Shekhar Sharma had bought Antfin’s 10.3% stake in the fintech platform, public investors were elated. One Communications’ shares ended about 7% higher on Monday. The purchase will take Sharma’s ownership to 19.42%, making him the single largest shareholder, while that of Antfin will drop to 13.5%. Based on the share’s Friday closing price, Sharma’s add-on stake was worth some $628 million. That he is willing to bet so heavily might help ease investor concerns about the company’s prospects as it struggles to turn profitable and stay so. Its loss has narrowed lately, but Paytm still needs to show steady profit generation. Also, with its Chinese ownership having reduced, Indian regulators should feel more reassured about where control lies, even though this aspect has not invited an official look-in. Eventually, however, only a better business showing can put the stock on a revival path.
