Saturday, 21 December 2024
Competition Commission of India approves Softbank’s 20% stake buy in One97 Communications
The Competition Commission of India has given its nod to Softbank Group Corp's acquisition of 20% stake in One97 Communications, the parent of digital payments leader Paytm.
The approval comes two months after the Noida-headquartered company raised Rs 9,000 crores ($1.4 billion) from SoftBank, making it the biggest investment by the Japanese internet and telecom conglomerate's in the Indian internet ecosystem.
With this, SoftBank has crossed another regulatory hurdle and will own about one fifth of the company estimated at about $7 billion - the second most valued startup in India after Flipkart.
ET had reported in May citing sources, that Softbank was expected to buy shares in a secondary transaction for about $400 million to gain the full 20% equity stake in One97. The secondary shares were to be purchased from Paytm's early investor SAIF Partners besides founder Vijay Shekhar Sharma.
Earlier this year, Sharma had also separately raised about $200 million in funding from Alibaba and SAIF Partners for his ecommerce business - Paytm Ecommerce—in which Softbank is not an investor. Paytm e-commerce which runs Paytm Mall is competing with Flipkart and the Jeff-Bezos led Amazon for top honours in India's $ 16 billion online retail industry.
In May this year, the company had launched its financial banking business under Paytm Payments Bank which will be fully operational by mid-August, Sharma had told ET in an earlier interview. The bank is set to expand to 31 branches and 3,000 customer service points in the first year of its operations. The Paytm Payments Bank will also be live on the Unified Payments Interface by August joining about 50 banks already using the platform.
Sharma owns majority stake in the payments company, with the remaining share being owned by One97 Communications. Sharma and One97 have together invested about Rs 220 crore in the payments bank.
Re-disseminated by The Asian Banker from The Economic Times
