Paytm has agreed to sell its stake in Japanese payments firm PayPay to SoftBank for $279.2 million, as the Indian company sheds non-core assets following a brutal regulatory crackdown earlier this year.
The sale of Paytm's stake in PayPay, which it received as acquisition rights six years ago, follows months of restructuring at the Indian company that saw the company sell its entertainment ticketing unit to Zomato for $246 million in August.
PayPay, controlled by SoftBank and Z Holdings, parent company of Yahoo Japan, is one of the leading payment apps in Japan.
The stake sale will take Paytm's cash reserves to $1.46 billion as the company attempts to regain market share in India's fiercely competitive payments market. The company's banking subsidiary was severely restricted by regulators in January, leading to an exodus of customers to competing services.
Shares of Paytm have almost tripled since June after India's payments regulator allowed it to start adding customers again to its flagship UPI service. The company reported its first quarterly profit in September, although this was largely due to proceeds from asset sales rather than operational improvements.
“We are grateful to Masayoshi-san and the PayPay team for giving us the opportunity to together create a mobile payment revolution in Japan,” Paytm said in a statement. “We remain fully committed and will continue to support PayPay’s product and technology innovations in the future. We are working on introducing new AI-powered features to accelerate the vision of PayPay in Japan.
Saturday's deal marks the end of Paytm's relationship with SoftBank, which divested its remaining shares in June after being an early backer through its Vision Fund.
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