Adani in talks with Paytm to acquire stake? Speculative, says fintech firm

One97 Communications said reports claiming that Gautam Adani, chairman of the Adani Group, is considering acquiring a stake in Paytm's parent company One97 Communications are speculative

One97 Communications, on Wednesday, said that reports stating that Gautam Adani, chairman of the Adani Group, is considering acquiring a stake in Paytm's parent company One97 Communications are speculative.

In an official statement, One97 Communications said, "We hereby clarify that the abovementioned 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."

According to a report in the Times of India (TOI), Adani is planning to acquire a stake in One 97 Communications. The report further said that Vijay Shekhar Sharma, the founder and chief executive officer (CEO) of Paytm, met with Adani at his office in Ahmedabad on Tuesday to "finalise the contours of a deal".

The report further said that Adani is engaging with West Asian funds to attract them as investors in One97 Communications, the company that pioneered mobile payments in India.

Sharma's ownership in One97 Communications stands at around 19 per cent, valued at Rs 4,218 crore. His direct stake in Paytm is 9 per cent, while an additional 10 per cent is held through Resilient Asset Management, a foreign entity. Both Sharma and Resilient are identified as public shareholders, according to One 97's filings with stock exchanges.

Other stakeholders in One97 Communications include Saif Partners, a private equity fund holding 15 per cent, Antfin Netherlands, established by Jack Ma, owning 10 per cent, and the company's directors collectively possessing 9 per cent.

Founded by Sharma in 2007, One97 Communications conducted the country's second-largest IPO and currently boasts a market capitalization exceeding Rs 21,000 crore.

Employee cost reduction

With plans to reduce employee cost, Paytm might cut around 15-20 per cent of its workforce in the current financial year. During FY23, the company maintained an average of 32,798 employees on its rolls, with 29,503 actively engaged. The average cost per employee stood at Rs 7,87,000. In FY24, the total expenditure surged by 34 per cent year-on-year (Y-o-Y) to Rs 3,124 crore, and the average employee cost is estimated to have increased to Rs 10,60,000.

In light of mounting losses, Paytm has initiated an employee cost reduction plan targeting to save Rs 400-500 crore. This could potentially result in a reduction of 5,000-6,300 employees.

Focus on UPI Lite wallet

Recently, One97 Communications said it will focus on the Unified Payments Interface (UPI) Lite wallet to move the users who prefer the feature for low-value transactions.

The company’s focus on the UPI Lite feature comes months after the Reserve Bank of India (RBI) cracked down on its associate entity Paytm Payments Bank. The banking regulator had barred the payments bank from accepting fresh credits in its mobile wallets after March 15.

Currently, customers with funds in their Paytm wallet can withdraw or transfer it to another wallet or bank account, up to the available balance. Once the balance is exhausted, they will no longer be able to add money to the Paytm wallet, as per the RBI directions.