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Stake sale · Financial Services

Paytm becomes Indian-owned as FII stake falls below 50%

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One97 Communications logo
Date
Company
One97 Communications
What it does
Digital payments and financial services platform
Kind
Stake sale
Stage
public
Based in
Noida
Sector
Financial Services

What they do

Paytm offers UPI payments, recharges, bill payments, FASTag, insurance, and flight booking

What happened

Foreign institutional investors cut their stake to 49.4% in Q4 FY26 from 51.76% in Q3, and domestic investors now hold 50.3% of equity share capital, making…

Why it matters

Domestic institutions raised their stake to 23.08%, with mutual funds and insurers increasing holdings

The details

  • Foreign institutional investors (FPIs) reduced their stake in Paytm to 49.4% in Q4 FY26 from 51.76% in Q3 FY26.
  • This drop pushed Paytm's foreign holding below 50%, making it an Indian owned and controlled company (IOCC).
  • Category I FPI holding fell to 23.77% from 25.33% quarter-on-quarter, with the number of such investors dropping to 558 from 613.
  • Category II FPI holding was cut to 0.48% from 1.24%, and 19 shareholders exited.
  • FDI (foreign direct investment) stake dipped by 15 basis points to 25.18% in Q4.
  • Domestic institutional investors (DIIs) raised their stake to 23.08% from 20.32% in Q3.
  • Mutual fund holding rose to 16.6% from 14.34%, with five new funds added, bringing the total to 51.
  • Bandhan Bank's Large and Mid Cap Fund emerged as a new holder with a 1.32% stake.

The bigger picture

  • Regulatory scrutiny on fintech firms with foreign links, especially those tied to Ant Group, has pushed companies to reduce foreign ownership.
  • The shift to Indian ownership may ease compliance and regulatory pressures.
  • FPIs sold Indian equities worth ₹1.17 lakh crore in the March quarter, reflecting broader selling pressure.

About the business

  • Paytm offers UPI payments, mobile recharges, bill payments, FASTag, insurance, and flight booking.
  • Paytm Money provides Margin Trading Facility at 7.99% per annum, with up to 4X buying power on 1,200+ stocks.
  • Paytm for Business offers QR codes, Soundbox, and Card Machines for merchant payments.
  • The company operates in India's digital payments and financial services sector.
  • It generates revenue through transaction fees, interest on customer funds, and financial services like insurance and investments.

The deal

Type
stake-sale

Investors

  • Foreign Portfolio Investors (seller) — Institutional investors based outside India who sold shares.
  • Domestic Institutional Investors (buyer) — Indian institutions like mutual funds and insurers that increased their holdings.
  • Bandhan Bank's Large and Mid Cap Fund (participated) — A mutual fund that became a new holder with a 1.32% stake.

Founders

  • Vijay Shekhar Sharma, Founder and CEO

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