Paytm founder Vijay Shekhar Sharma buying 10.30% stake in the company from Antfin resulted in a Chinese entity ceasing to be largest shareholder in the company, which analysts believe to be positive for Paytm’s fundamentals and also remove overhang on the stock.
On Monday, Paytm announced that Sharma entered into an agreement to purchase a 10.30% stake in the company from Antfin (Netherlands) Holding BV. Antfin will transfer 6.53 crore shares of Paytm to Resilient Asset Management B.V., an entity in which Sharma owns the complete 100% stake.
Analysts at BofA Securities noted that a Chinese shareholder ceasing to be the largest shareholder, would also directionally be positive for the company fundamentals.
“We consider this announcement to be positive as it removes overhang on the stock from the risk that Antfin in future may look to reduce its stake leading to more supply. Furthermore, Sharma buying the stake at Friday’s close indicates his confidence in the story with a “skin in the game" approach," BofA said in a report.
This event also reduces risk that some other strategic investor coming who would have a major stake similar to that of Sharma, it added.
Moreover, analysts believe a Chinese shareholder (Antfin) ceasing to be the largest shareholder, would also directionally be positive for the company fundamentals.