Fintech

Vijay Shekhar Sharma Takes Control with 24.3% Voting Rights

• ByStartupStory     |    August 11, 2023

Following the Antfin deal, Paytm’s key figure, Vijay Shekhar Sharma, holds a significant 24.3% of the company’s voting rights, as revealed by investor advisory firm IiAS.

The report by Institutional Investor Advisory Services underscores the importance of Sharma’s formal indication of continued control, reassuring investors that he is indeed the driving force and not a mere “shadow presence.”

Through a recent non-cash transaction with Alibaba’s Antfin (Netherlands) Holding BV, Sharma’s stake in Paytm surged to 19.42%. However, Antfin still retains economic rights over the transferred stake.

“Vijay Shekhar Sharma is the founder of Paytm, but not its promoter. He is a non-retiring director, chairs Paytm’s board and has a right to a board seat if he holds at least 2.5 per cent of the company’s equity. As a non-promoter, he receives stock options. Put differently, Vijay Shekhar Sharma enjoys the rights akin to that of a promoter and not its responsibilities and restrictions,” IiAS had said.

Despite the erosion of shareholder wealth from listing price, cash burn without profitability, and debates about his compensation, Sharma remains favorable to investors. As Paytm’s present Chairperson, Managing Director, and CEO, he holds significant sway over the company’s direction.

IiAS previously questioned Sharma’s stock option eligibility, given his non-promoter status while enjoying privileges akin to promoters. The advisory firm noted that Paytm is among various startups not classifying founders as promoters, a trend often observed in companies with pre-IPO private equity investments.

The unique distinction lies in these founder’s ability to receive stock options that go beyond Indian regulations for promoters, accompanied by less restrictive equity holdings.

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