SoftBank reduces stake in crisis-hit Paytm to less than 3%
SoftBank has reduced its stake in Paytm, now holding only 2.83% compared to 5.01% previously, as reported in a recent exchange filing. The Japanese conglomerate has been gradually decreasing its ownership in the fintech firm. As of September 2022, SoftBank held 17.5% stake in Paytm. Chinese fintech firm Ant Financial has reduced its stake as well. Other major investors, such as Warren Buffett's Berkshire Hathaway and China's Alibaba Group, exited Paytm in 2023.
Paytm shares dip amid RBI order to close banking arm
Paytm's stock has taken a hit, dropping 3.4% in afternoon trading and losing around $2.8 billion in value since January 31, a total decline of 48.5%. At the time of writing, the stocks traded at Rs. 404 which is 0.54% lower than yesterday. The downturn comes after the Reserve Bank of India (RBI) ordered Paytm to close its banking division due to ongoing non-compliance with regulations.
Paytm struggles to boost investors' confidence
The continued divestment by prominent investors underscores the challenges Paytm faces as it deals with regulatory hurdles and waning investor confidence. Paytm founder Vijay Shekhar Sharma has stepped down as chairman of Paytm Payments Bank to insulate the remaining businesses from its lending business. The company hopes to raise investors' confidence by distancing the Paytm brand from the bank. On January 31, RBI found persistent regulatory issues with Paytm Bank, which led to curbs.
