The Competition Commission of India (CCI) has given approval to SoftBank Group’s acquisition of 20% stake in digital payments major Paytm’s parent One97 Communications.
According to a report in Business Standard, the nod comes two months after Paytm raised Rs 9000 crore ($1.4billion) from SoftBank. CCI announced the approval on its Twitter handle on Tuesday.
This is SoftBank’s biggest investment in India and helps it remain as the lead investor in the company, pushing Chinese internet major Alibaba to the second spot.
It is also its biggest bet after its failed investments in Snapdeal and Freecharge where it suffered a loss of nearly a billion dollars. It is also a major shareholder in cab aggregator Ola.
With this infusion from SoftBank, One97 communications is now valued at $9 billion.
"In line with the government's vision to promote digital inclusion, we are committed to transforming the lives of hundreds of millions of Indian consumers and merchants by providing them digital access to a broad array of financial services, including mobile payments. We are excited to partner with Paytm in this journey and will provide them with all our support," said Masayoshi Son, chairman and chief executive officer, SoftBank Group Corp, in a statement had said in May,
BS reports that the nod also sets the stage for Paytm to aggressively expand its payments banking business and the e-commerce business with Paytm Mall.
Paytm launched its banking operations under Paytm Payments Bank in May, which will be fully operational by mid-August. Paytm intends to expand the bank to 31 branches and 3000 customer service points in the first year of its operations.
Founder Vijay Shekhar Sharma owns a majority stake in Paytm Payments Bank with One97 communications owning the rest. As per an Economic Times report, Vijay and One97 together invested about Rs 220 crore in the payments bank.
Paytm also raised $200 million earlier this year from SAIF Partners and Alibaba for its ecommerce business Paytm Mall, which comes under Paytm Ecommerce. Incidentally, SoftBank is not an investor here.