Paytm's Singapore arm to sell stock acquisition rights in Japan's PayPay for Rs 2,364 crore

In a significant move, fintech giant One97 Communications, the owner of Paytm, announced that its Singapore-based subsidiary has approved the sale of its Stock Acquisition Rights in Japan's PayPay to SoftBank Vision Fund 2 for Rs 2,364 crore. The transaction is set to be finalized in December 2024, as per the regulatory filing made by the company on Saturday.

Agreement and Technology Services

Paytm and Paytm Singapore had previously entered into an agreement with the Japanese digital wallet firm PayPay, along with SoftBank Corp, SoftBank Group Corp, and Yahoo Japan Corporation. This agreement was to provide technology services to PayPay, a digital wallet service that has gained substantial traction in Japan.

Stock Acquisition Rights Details

In exchange for these services, Paytm Singapore received Stock Acquisition Rights. These rights are convertible into 1,59,012 shares, representing a 7.2 percent stake in PayPay on a fully diluted basis.

Approval and Transaction Details

On December 6, 2024, One97 Communications Singapore Private Limited informed the company that its Board of Directors had approved the sale of all its Stock Acquisition Rights in PayPay Corporation to a SoftBank Vision Fund 2 entity. The net proceeds from this sale are expected to be JPY 41.9 billion, equivalent to Rs 2,364 crore.

Valuation Implications

This transaction values PayPay at approximately USD 3.8 billion or about Rs 32,000 crore. The completion of this sale will mark a significant financial milestone for both Paytm and its Singapore arm.