India's domestic mutual funds have reduced their stake in One 97 Communications Ltd., parent company of payments aggregator Paytm, marking a significant shift in institutional sentiment. This represents the first instance of mutual funds trimming their stake since the company's public listing in November 2021, ending a consistent pattern of increasing institutional ownership.

Mutual Fund Holdings Decline

The latest shareholding pattern filed with the Bombay Stock Exchange reveals that mutual funds now hold a 14.96% stake in Paytm at the end of the December quarter, down from 16.25% in the September quarter. This decline breaks a trend that had persisted since the company's market debut.

Among the prominent mutual fund holders, Motilal Oswal MF, Nippon India MF, and Mirae Asset MF all reduced their positions during the quarter. Notably, Bandhan MF's name no longer appears in the shareholding list, indicating either a reduction below the 1% disclosure threshold or a complete exit from the stock.

Retail Investor Exodus Continues

Retail shareholders, defined as those with authorized share capital up to ₹2.00 lakh, continued their selling spree for the seventh consecutive quarter. Their shareholding has dropped to the lowest level since September 2023, with small retail investors consistently reducing their positions since the June quarter of 2024.

Stock Performance and Recovery

Paytm shares experienced significant volatility, hitting an all-time low of ₹318.00 on February 16, 2024, amid concerns over Reserve Bank of India regulatory actions. However, the stock has since staged a remarkable recovery, reaching a 52-week high of ₹1,381.00, representing a 334% rebound from the record lows.

The recovery was supported by easing regulatory concerns and positive developments, including Paytm Payments Bank securing final authorization from the Reserve Bank of India for its payment aggregator license, covering online, offline, and cross-border transactions.

Current Valuation and Outlook

Despite the substantial recovery, Paytm shares remain 40% below their IPO price of ₹2,150.00. Market participants are closely watching for the company's third-quarter results, which could serve as the next significant catalyst for the stock. Investor sentiment has been buoyed by expectations that the company may achieve profitability in the near term.

One 97 communications has announced the completion of two significant corporate developments through regulatory disclosures filed with BSE Limited and National Stock Exchange of India Limited on January 13, 2026. The company has successfully executed strategic expansion moves both domestically and internationally.

Fincollect Services Acquisition Completed

The company has completed the acquisition of 100% stake in Fincollect Services Private Limited from Urja Money Private Limited. This acquisition, which was initially communicated on October 15, 2025, has now been finalized with Fincollect Services becoming a direct wholly owned subsidiary of One 97 Communications effective January 13, 2026.

European Expansion Through Luxembourg Subsidiary

In a parallel development, Paytm Cloud Technologies Limited (PCTL), a subsidiary of One 97 Communications, has successfully incorporated a wholly owned subsidiary in Luxembourg. The new entity, named Paytm Europe Payments S.A., was incorporated on January 12, 2026, following the company's earlier communication dated December 22, 2025.

Regulatory Compliance and Documentation

Both developments have been disclosed under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The disclosure was signed by Sunil Kumar Bansal, Company Secretary & Compliance Officer (FCS: 4810), and digitally submitted on January 13, 2026.

These strategic moves reflect One 97 Communications' ongoing efforts to strengthen its business portfolio through acquisitions and expand its operational footprint into European markets through the Luxembourg-based entity.