Paytm sells stake in PayPay to SoftBank for $279.2 million

Paytm has agreed to sell its stake in Japanese payments company PayPay to SoftBank for $279.2 million, because the Indian company divests non-core assets following tough regulatory clampdowns earlier this yr.

The sale of Paytm’s stake in PayPay, which Paytm received through acquisition rights six years ago, comes after months of restructuring on the Indian company, which in August saw the corporate sell its entertainment ticketing module to Zomato for $246 million.

PayPay, controlled by SoftBank and Yahoo Japan parent company Z Holdings, is a number one payment application in Japan.

The share sale will increase Paytm’s money reserves to $1.46 billion as the corporate tries to regain share in India’s fiercely competitive payments market. In January, regulators imposed severe restrictions on the affiliate’s banking activities, leading to an exodus of shoppers to competing services.

Paytm’s shares have almost tripled since June after India’s payments regulator allowed it to resume adding customers to its flagship UPI service. In September, the corporate reported its first quarterly profit, although this was largely due to proceeds from asset sales moderately than operational improvements.

“We are grateful to Masayoshi-san and the PayPay team for enabling us to jointly create a mobile payment revolution in Japan,” Paytm said in an announcement. “We remain fully committed and will continue to support PayPay’s product and technology innovations in the future. We are working to introduce new AI-powered features to accelerate the PayPay vision in Japan.”

Saturday’s deal marks the top of Paytm’s relationship with SoftBank, which divested its remaining shares in June after providing early support to the corporate through the Vision Fund.