Adani Group chairman Gautam Adani is in negotiations to purchase stock in One 97 Communications, the company that runs Paytm. According to a report by Times of India, Paytm founder and CEO Vijay Shekhar Sharma met Gautam Adani at the latters office in Ahmedabad on May 28 to “finalize the contours of a deal”. Experts who are known to the deal, say that the Adani Group would join the fintech space, going up against PhonePe, Google Pay, and Jio Financial, which is owned by Mukesh Ambani, if the deal closes.It is worth to be noted that this deal has come after RBI barred Paytm from doing most of its banking activity due to persistent non-compliance, earlier this year.However, sources also call the statements speculative, but soon after the news surfaced, Paytm shares hit the 5% upper circuit in early trade on May 29.How much stake does Vijay Shekhar Sharma have in PaytmAccording to the reports, Vijay Shekhar Sharma owns about 19% of One 97 Communications directly and holds another 10% through a foreign entity Resilient Asset Management. Both are listed as public shareholders. Other significant shareholders of One 97 are Saif Partners (15%), Antfin Netherlands (10%), and the companys directors (9%). One 97 has a market cap of Rs 21,773 crore and started as a recharge platform before moving its payment and merchant acquiring business to Paytm Payments Bank (PPBL) which faced action by the Reserve Bank of India (RBI).What is the Paytm crisis all aboutThe Reserve Bank of India (RBI) imposed the restrictions on Paytm Payments Bank on January 31, for repeating violations of norms and non-compliance with multiple rules, following which it barred the PPBL for credit transactions after February 29. In March, it was stopped for boarding new clients.The most recent action was taken in response to an audit report that claimed that the bank had persistent non-compliance and ongoing material supervisory concerns. More than half of investors value has been lost since the RBIs action on Paytm shares.The fintech companys problems seem never-ending as rumors have it that on May 8, one of its major lending partners, Aditya Birla Finance, invoked loan guarantees as a result of customer repayment defaults. After the RBI prohibited Paytm Payments Bank from operating, reports stated that in addition to Aditya Birla Finance, other lenders including Piramal Finance and Clix Capital also terminated their relationships with Paytm.Now, Adanis entry into the same is seen as a major move in the financial sector, which would enhance the digital portfolio and accelerate the ambition to become a leading player.
