Shares of One 97 Communications Ltd, the parent company of digital payments giant Paytm, experienced a notable uptick in Tuesday's trading following a significant block deal. The transaction, valued at Rs 2,948.94 crore, involved the exchange of 1,92,10,110 Paytm shares.
The block deal saw shares change hands at Rs 1,535.10 apiece, representing a 2.85 percent discount compared to Monday's closing price of Rs 1,580.20. Despite opening negatively at Rs 1,573, the Paytm stock quickly recovered, trading 0.84 percent higher at Rs 1,596.45 apiece on the BSE by 9:17 am.
Details of the Paytm Block Deal
The substantial transaction was initiated by Resilient Asset Management B.V., which announced its intention to sell up to a 4.98 percent stake in Paytm. This sale was conducted under an existing Optionally Convertible Debenture (OCD) agreement with Antfin (Netherlands) Holding B.V.
Crucially, a filing with stock exchanges on Monday clarified that while Resilient was the seller, the economic value generated from this sale would be retained by Antfin under the terms of their OCD agreement. Resilient had acquired a 10.20 percent stake in Paytm from Antfin in August 2023, with the economic interest remaining with Antfin.
Company's Stance and Market Reaction
One 97 Communications informed the stock exchanges that it was not a party to this particular transaction. The company also confirmed that there would be no change in the direct shareholding of its founders as a result of the block deal.
The term sheet for the deal set a floor price of Rs 1,535.10, aligning with the reported discount. Initially, approximately 1.92 crore shares, accounting for a 3 percent stake, were expected to change hands, with an upsize option to sell an additional 1.27 crore shares, or 1.98 percent stake, for about Rs 1,946 crore. A 90-day lock-up period is also part of the agreement for the shares involved.
Investors reacted positively to the news, pushing Paytm's share price higher despite the initial discounted sale. This reflects market confidence following clarity on the transaction's structure and the underlying economic interests.