Paytm denies Adani stake acquisition rumours; stock surges

In response to recent speculation, One97 Communications, the parent company of Paytm, clarified that it is not engaged in any discussions with Adani Group regarding a potential stake acquisition. The clarification came after a media report suggested that Adani Group Chairman Gautam Adani was considering acquiring a stake in the fintech firm.

“We hereby clarify that the above-mentioned news item is speculative, and the company is not engaged in any discussions in this regard. We have always made and will continue to make disclosures in compliance with our obligations under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,” One97 Communications stated on May 29.

Despite the company’s denial, Paytm shares hit the 5 per cent upper circuit in early trade on May 29.

The news agency reported that Adani Group Chairman Gautam Adani was keen on acquiring a stake in One97 Communications, which runs mobile wallet Paytm. The report also mentioned a meeting between Paytm founder and CEO Vijay Shekhar Sharma and Gautam Adani on May 28 at the Adani Group’s Ahmedabad headquarters to “finalize the contours of a deal.”

If the deal were to materialize, it would position the Adani Group in direct competition with major players in the fintech market, including Google Pay, Walmart-owned PhonePe, and Mukesh Ambani’s Jio Financial. This acquisition would also mark another significant investment for Adani after high-profile purchases like Ambuja Cements and NDTV.

Vijay Shekhar Sharma holds almost 19 per cent of One97 Communications, valued at Rs 4,218 crore at the closing price of Rs 342 per share on May 28. He owns 9 per cent directly and an additional 10 per cent through the overseas company Resilient Asset Management. Both Sharma and Resilient Asset Management are identified as public shareholders in One97’s stock market filings.

Paytm has faced several challenges recently. On January 31, the Reserve Bank of India (RBI) imposed business restrictions on Paytm Payments Bank (PPBL) due to repeated violations of norms and non-compliance with multiple rules. The RBI barred PPBL from accepting new deposits and conducting credit transactions after February 29. 

Additionally, in March 2024, PPBL was prohibited from onboarding new clients following an audit report that highlighted persistent non-compliance and significant supervisory concerns. These actions have significantly impacted Paytm’s stock, which has lost more than 50 per cent of its value since the RBI’s move.

Adding to its woes, key lending partners such as Aditya Birla Finance, Piramal Finance, and Clix Capital severed ties with Paytm following the RBI’s restrictions on PPBL. Reports suggested that Aditya Birla Finance invoked loan guarantees due to repayment defaults from customers on May 8.

The rumoured partnership with the Adani Group, though speculative, seemed like a potential turning point for the embattled fintech company. Meanwhile, Adani Group stocks, including Adani Enterprises, Adani Green Energy, and Adani Ports & SEZ, have recently recovered from losses triggered by a critical Hindenburg report and are now trading above their January 2023 levels.

The ongoing developments underscore the dynamic nature of the fintech and business landscape in India, with regulatory compliance and strategic partnerships playing crucial roles in shaping the industry’s future.