Update: MoneyControl says that the talks have collapsed.. No merger possible it seems.
Earlier..
Indian telecom mogul and Airtel chief Sunil Mittal is reportedly looking to acquire a stake in Paytm by merging his financial services unit Airtel Payments Bank into Paytm Payments Bank through a stock deal.
Both companies’ statements
He may also purchase Paytm shares from other stakeholders but it should be noted that the talks are still in early stages, and the deal may not materialize.
A representative for Paytm has stated, “We remain fully focused on our strong organic growth journey and are not involved in any such discussions.”
A spokesperson for Bharti Enterprises Ltd., controlled by Mittal, declined to comment on market speculation.
On the rebound
Paytm, formerly known as One 97 Communications Ltd., has recently shown signs of profitability and has rebounded about 40 percent from its record low in November.
It narrowed its Q3 loss after focusing on customer acquisition, leading to a boost in revenue, it said in an exchange filing this month.
The company’s revenue from operations increased to Rs 2,062 crore – a growth of 42 per cent YoY and 8 per cent QoQ.
It has credited this growth to increased consumers and subscription services by merchant partners along with a growth in the loan distribution and commerce business.
Share prices see no improvement
Paytm’s revenue from financial services now accounts to 22 per cent of total revenue, higher by 9 per cent as against the corresponding quarter in FY 2022.
Despite this, its shares have never traded above its IPO price of Rs 2,150 since its listing in November 2021, a change of fortunes as it was once India’s most valuable startup.
Airtel Payments already profitable
It has also suffered from the worst first-year share plunge among large IPOs over the past decade.
It counts SoftBank Group Corp. and Ant Group Co. from China as its investors.
Meanwhile, Mittal’s six-year-old payments bank boasts 129 million customers and has turned a profit in the year to March 31, 2022 as per exchange filings.
