Antfin Holdings selling 10.3% stake in India's Paytm for $628 million

BENGALURU (Reuters) -A subsidiary of China's Ant Financial will sell a 10.3% stake in India's Paytm, with the company's founder and CEO intending to boost his holding to simplify the ownership structure of one of India's largest payment firms.

Vijay Shekhar Sharma will buy a 10.3% stake from Antfin (Netherlands) Holding B.V. valued at $628 million, the fintech company said in a filing on Monday.

Shares of Paytm rose as much as 11.4% on Monday after the announcement and have gained more than 50% so far this year.

Sharma's stake purchase from Antfin (Netherlands) Holding B.V. is priced at Paytm's last closing price of 796.6 rupees a share.

Following the stake sale, Antfin will cease to be the largest shareholder in the company, with its holding reduced to 13.5%.

In February, China's Alibaba sold its entire stake in Paytm to exit the company.

Japanese investment firm Softbank Group Corp has also been reducing its stake in Paytm through open market deals, with its shareholding reduced to 9.18% after its latest deal.

Paytm founder Sharma will now be the largest shareholder in the digital payments firm with a holding of 19.42%.

"No cash payment will be made for this acquisition, and neither will any pledge, guarantee, or other value assurance be provided by Mr Sharma, directly or otherwise," Paytm said in a statement.

The company added that there would be no change in the management or control of Paytm, with Sharma and the existing board continuing in their roles.

Resilient Asset Management, Sharma's overseas entity, will issue optionally convertible debentures to Antfin in consideration for the acquisiton.

(Reporting by Varun Vyas in Bengaluru; Editing by Dhanya Ann Thoppil, Eileen Soreng and Lincoln Feast)