Paytm and China's Ant Group have categorically refuted media reports around the latter considering a stake sale in the Indian payments startup.
Ant Group, formerly called Ant Financial, is part of Chinese billionaire Jack Ma's Alibaba Group. On Wednesday, November 2, Reuters reported that Ant was mulling selling its 30% stake in Paytm amid tensions between India and China coupled with a toughening competitive landscape.
The news agency further reported that the possible transaction had not been firmed up and Ant had not launched a formal sale process as yet.
However, both companies denied any such development on their respective Twitter handles.
"Sad to see a responsible organisation publish an untrue headline & article, when both @antgroup and us has officially denied it," a Paytm tweet read.
Meanwhile, the Ant Group tweeted, "The Reuters story is untrue. We are disappointed that Reuters decided to run the story based on false information."
The Reuters story is untrue. We are disappointed that Reuters decided to run the story based on false information. pic.twitter.com/2LhVVYWFQj— Ant Group (@antgroup) December 2, 2020
Paytm spokesperson also said, "The information is absolutely false & misleading. There has been no discussion with any of our major shareholders ever, nor any plans, about selling their stake or becoming the controlling shareholder. Our mission is to empower half a billion Indians with digital financial services and pursue the vast opportunity presented by the digital financial revolution in our country. We are seeing a dramatic increase in revenues and acceleration of our path to breakeven."
Paytm, which is also backed by SoftBank Group Corp among others, was valued at about $16 billion during its latest private fundraising round a year ago. At that valuation, Ant's stake in the Indian firm is worth about $4.8 billion.
Relations between India and China are at a nadir after a border clash in June in which 20 Indian soldiers were killed.
Since the clash, India has tightened rules for investments from China and banned over 200 Chinese mobile apps (including from tech giants Tencent, Alibaba, and ByteDance) in phases. It banned 43 more apps late last month.
Indian start-ups are heavily funded by Chinese investors such as Alibaba and Tencent. Ant first invested in Paytm in 2015 and owns a 30% stake in the firm via its parent company, One97 Communications, according to Ant's initial public offering prospectus, which described the Indian firm as a major associate.